Nigerian Naira Forecasted to Depreciate Against Dollar Amid Supply Constraints

Nigerian analysts are forecasting a depreciation of the Naira against the Dollar this week, with the exchange rate settling at N1,417.94/$. The Nigerian foreign exchange market saw the Naira weaken across official and parallel segments due to persistent supply constraints and high demand.

AIICO Capital analysts noted a slight improvement in liquidity but highlighted the Naira's vulnerability to structural imbalances. Despite a rise in external reserves by $111.17 million to $46.01 billion, the Naira faced sustained pressure, especially in the parallel market where it traded around N1,487.00.

Remittances have seen a significant increase, with CBN Governor Olayemi Cardoso projecting a rise to at least $1 billion by year-end. Analysts caution that the Naira's movement will depend largely on FX supply conditions and structural imbalances in the market.