Naira Weakens at Official and Parallel Markets Despite CBN Interventions

The Naira recorded significant losses of N30 and N28.48 during last week's Central Bank of Nigeria (CBN) Retail Dutch Auction System at both the official and parallel foreign exchange markets. This decline highlights ongoing challenges despite the central bank’s efforts to stabilize the currency.

On Friday, the Naira depreciated to N1645 against the US dollar, compared to the N1615 exchange rate observed on August 23, 2024, just one week prior. Similarly, FMDQ data, which monitors official foreign market trading, showed that the Naira fell to N1598.56 per dollar on Friday, down from N1570.14 traded the previous week.

This trend suggests that both foreign exchange markets continue to face pressure, weakening despite various interventions by the Central Bank of Nigeria.

However, there was some strengthening of the Naira against the dollar in the foreign exchange market on Friday, with transaction turnover rising to $172.80 million from $155.52 million on Thursday. This occurred just weeks after the CBN reinstated the Retail Dutch Auction System, a move aimed at addressing the surge in dollar demand.

The fluctuations reflect the broader challenges facing Nigeria's foreign exchange market, as the CBN continues to seek solutions to bolster the Naira amid ongoing economic pressures.