Naira Weakens Against Dollar Amid High Reserves

The Nigerian naira has weakened against the US dollar in the country's foreign exchange markets, closing at N1,328.50 per dollar at the Nigerian Foreign Exchange Market (NFEM), marking a 0.05% depreciation from the previous session. This decline follows the Central Bank of Nigeria's (CBN) reduction of its benchmark interest rate and is attributed to demand pressures and tighter liquidity.

In the parallel market, the naira depreciated by 0.51%, reaching N1,387 per dollar, which widened the gap between the official and parallel market rates to about N59 per dollar from N52 in the previous session. This FX spread indicates differences in dollar supply and demand across the official and informal segments.

Despite the naira's weakness against the dollar, it strengthened against other major currencies, settling at N1,762.92 against the British pound and N1,514.89 against the euro at the official window, according to the CBN’s daily foreign exchange report.