SAT MAY 16 2026-theGBJournal| Nigeria’s foreign exchange market came under renewed pressure during the week as the naira weakened by 1.0% week-on-week to close at N1,372.00 per dollar, amid heightened demand for foreign currency triggered by the Central Bank of Nigeria’s Open Market Operations (OMO) auction.
The depreciation reflected stronger appetite for dollar liquidity from local investors and corporates, which outweighed offshore inflows and supply in the market.
Across the forward contracts market, bearish sentiment on the naira persisted, with the local currency depreciating across all maturities, signaling sustained concerns over near-term FX liquidity conditions and exchange rate stability.
The 1-month forward contract depreciated by 0.7% to N1,394.33/USD, while the 3-month contract weakened by 0.6% to N1,432.87/USD.
Similarly, the 6-month forward rate declined by 0.7% to N1,489.27/USD, while the 1-year contract fell by 1.0% to N1,601.92/USD.
The sustained depreciation across maturities indicates that market participants continue to price in lingering FX volatility and persistent demand pressures despite ongoing reforms in the foreign exchange market.
However, in a positive development, Nigeria’s gross external reserves recorded their first weekly increase in eight weeks, rising by USD148 million to USD48.54 billion as of May 14, 2026, offering modest support for investor confidence and the country’s external buffer position.
Analysts note that tighter liquidity management by the monetary authorities and stronger participation in high-yield instruments have continued to drive demand for foreign exchange, particularly from domestic institutions and offshore participants seeking hedging positions.
X-@theGBJournal|Facebook-the Government and Business Journal|email:gbj@govbusinessjournal.com|govandbusinessj@gmail.com
