Nigerian Naira Weakens on Supply Constraints in FX Markets

The Nigerian Naira faced depreciation across official and parallel market segments due to supply constraints in the foreign exchange markets. The local currency shed recent gains, settling at N1,421.63 to a dollar, compared to N1,417.94 the previous week in the parallel market.

AIICO Capital reported that the Naira fell to N1,487.00 during the week, reflecting pressure on the currency. Despite some volatility within a narrow range, the market was largely shaped by supply-demand imbalances.

Nigeria's external reserves increased by $111.17 million to $46.01 billion, providing a buffer against short-term pressures. Cowry Asset Management echoed similar sentiments, noting the Naira's weakening across market segments.

Analysts maintain a cautious outlook, expecting the Naira to trade within a similar range in the coming weeks, with external reserves providing support amid persistent demand pressures and structural FX imbalances.