Naira hits N1,600/$ in official market as forex pressures mount

BY MOTOLANI OSENI

The naira weakened to N1,600 per US dollar in the Nigerian Foreign Exchange Market (NFEM) on Friday, breaking through the N1,500/$ threshold it had held for the past three months.

Data from the Central Bank of Nigeria (CBN) showed the indicative rate rose from N1,569 per dollar on Thursday, representing a N31 depreciation.

In the parallel market, the naira also lost ground, sliding to N1,565 per dollar from N1,555 the previous day. As a result, the gap between the official and black market rates widened significantly to N35 per dollar, compared to N14 a day earlier.

Traders attribute the weakening of the currency to a surge in demand for the dollar, especially from fuel importers, amid reports that Dangote Refinery may be prioritising dollar-denominated sales. The development has triggered market speculation and increased pressure on the local currency.

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Rising global economic uncertainties and ongoing trade tensions among major economies have further worsened investor sentiment and contributed to foreign exchange volatility. With more foreign portfolio investors pulling out funds, the Nigerian Exchange Limited (NGX) recorded a 78 per cent gap between capital outflows and inflows in January, deepening dollar scarcity.

Despite the Central Bank’s recent intervention with a reported $500 million injection into the market, the naira continues to struggle due to limited supply and sustained demand.

Analysts warn that unless dollar inflows improve, particularly through exports or foreign direct investment, the naira could face continued instability across both the official and parallel markets.