The Nigerian naira experienced a notable decline on Wednesday, slipping to N1,625 per dollar in the parallel market—representing a 1.5 percent drop from Tuesday’s N1,600 rate.
Currency dealers attributed the weakening to intensified demand, as both individuals and businesses rushed to secure dollars for imports and routine expenses.
The official foreign exchange market also saw a slight but consistent decline in the naira’s value over four consecutive trading sessions, even as Nigeria’s external reserves saw some improvement.
According to the Central Bank of Nigeria (CBN), foreign reserves increased by 0.43 percent, climbing to $38.09 billion as of May 6, 2025, compared to $37.93 billion recorded on April 30.
Nonetheless, the naira weakened by 0.4 percent in the Nigerian Foreign Exchange Market (NFEM) on Wednesday, with the dollar closing at N1,608.60—slightly up from N1,602.18 on May 2, based on CBN statistics.
Experts have linked the continued decline in the official rate to reduced market liquidity. A recent report from Coronation Merchant Bank’s research unit indicated that forex inflows last week dropped to $668 million, down by 9 percent from the previous week’s $735 million.
The breakdown of these inflows showed that the CBN contributed 27.73 percent, foreign portfolio investors 9.22 percent, non-bank corporates 33.43 percent, exporters 24.34 percent, and other sources 5.28 percent. On a weekly basis, gross reserves increased by 0.36 percent to close at $37.93 billion by April 30.
The naira also depreciated against the Chinese yuan, sliding by 0.40 percent to settle at N220.31 per yuan.
In the previous week, the official spot market recorded a 0.17 percent loss in naira value against the dollar, with the currency closing at N1,602.18 per dollar.
Forward market data also suggested expectations of continued naira depreciation. Rates for forward contracts were N1,646.57 for one month, N1,724.19 for three months, N1,837.00 for six months, and N2,056.24 for a year.
Meanwhile, the naira closed at N1,610 per dollar in the parallel market last Friday, the same level it held the week before.
