Naira Suffers Setback at Official Market Amidst Foreign Political Tensions
Lagos, Nigeria – The Naira experienced a noticeable decline against the US Dollar this past week, shedding N14.85 at the official Nigerian Foreign Exchange Market (NAFEM). Data from the Central Bank of Nigeria (CBN) revealed that the Naira closed at N1,436.58 per dollar on Friday, November 7, a depreciation from the N1,421.73 rate recorded on October 31st.
This represents a 1.04 per cent loss in the local currency’s value week-on-week. Market analysts and reports have linked the sharpest drop of the week to Monday’s trading, which followed a threatening statement from United States President Donald Trump regarding Nigeria. The political tension introduced significant uncertainty, causing a ripple effect in the forex market.
In a curious twist, the parallel market, often called the black market, told a different story. Contrary to the official market’s performance, the Naira appreciated significantly there, trading at N1,445 per dollar compared to N1,485 the previous Friday. This divergence highlights the complex and often unpredictable sentiments driving Nigeria’s foreign exchange landscape.
Despite the Naira’s mixed performance across different market windows, a key positive indicator emerged. The nation’s foreign reserves continued their upward trajectory, rising to $43.32 billion as of November 6th. This growth in reserves offers a buffer and a point of optimism for the economy’s external sector, even as the currency faces volatility.
