FRI JUNE 12 2026-theGBJournal|Nigeria’s naira weakened modestly against the U.S. dollar in this week, underscoring persistent demand pressures in the foreign-exchange market even as the country’s external reserves extended their recent recovery.
The local currency depreciated by 0.2% week-on-week to close at NGN1,363.00 per dollar in the official market.
The decline came as increased demand from domestic participants partially outweighed foreign portfolio and offshore inflows, highlighting the delicate balance between improving external liquidity conditions and underlying demand for foreign exchange.
In a positive signal for the country’s external position, Nigeria’s gross foreign reserves rose by $231.5 million to $50.42 billion as of June 9, marking the fifth consecutive week of accumulation.
The sustained increase in reserves reflects stronger foreign-currency inflows, including oil receipts and capital inflows, and provides additional support for the Central Bank of Nigeria’s efforts to stabilize the currency market.
The reserves growth also strengthens the nation’s import cover and enhances investor confidence in the authorities’ ability to manage exchange-rate volatility.
However, sentiment in the derivatives market remained cautious, with traders pricing in further weakness for the naira over the medium term. Forward contracts depreciated across most maturities, indicating expectations of continued pressure on the currency despite the recent improvement in reserves.
The three-month forward rate weakened 0.3% to N1,428.05 per dollar, while the six-month contract declined 0.7% to N1,487.48. The one-year forward contract recorded the steepest decline, falling 1.0% to N1,602.31 per dollar. The one-month contract was unchanged at N1,385.96.
The divergence between rising reserves and weaker forward rates suggests investors remain cautious about Nigeria’s longer-term foreign-exchange outlook.
While stronger reserve buffers and steady offshore inflows have helped contain near-term volatility, market participants continue to monitor oil-price trends, capital flows, and domestic dollar demand for signals on the naira’s trajectory in the second half of the year.
The latest market performance reflects a foreign-exchange market that is becoming more liquid but remains sensitive to shifts in demand dynamics.
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