Naira Weakens Against Dollar and Pound, Gains on Euro

On October 12, the naira weakened against the US dollar at the Nigerian Autonomous Foreign Exchange Market, with the official exchange rate moving to N1,332.09/$1 from N1,331.19/$1, marking a 0.07% depreciation. The naira also fell against the pound sterling, closing at N1,762.63/£1 compared to N1,759.16/£1, a decline of N3.47.

Conversely, the naira appreciated against the euro, closing at N1,489.15/€1, up by N1.64 from N1,490.79/€1. The Central Bank of Nigeria reported a flat trading rate of N1,360/$1 in the parallel market.

Interbank foreign exchange turnover dropped by 77.7% to $36.242 million from $162.736 million. Despite this decline, Nigeria's net foreign reserves rose to $46 billion, bolstered by private capital inflows, which may enhance the Central Bank's market intervention capacity.

The increase in dollar transactions last week reached $3.37 billion, primarily driven by spot transactions. Cordros Securities indicated that future foreign exchange inflows will depend on foreign portfolio participation and domestic dollar supply recovery.