SAT JUNE 27 2026-theGBJournal| The naira weakened against the U.S. dollar during the week despite renewed intervention by the Central Bank of Nigeria (CBN), highlighting persistent foreign-exchange demand pressures even as the country’s external reserve position continued to improve.
The local currency depreciated 0.98% week-on-week to close at N1,384.00 per dollar in the official market, while the CBN returned to the FX market with a $100 million dollar sale—its first direct intervention in eight weeks—in a move aimed at easing liquidity constraints and stabilising the exchange rate.
The intervention came as Nigeria’s gross external reserves climbed by $106.29 million to $51.25 billion as of June 25, marking a seventh consecutive week of reserve accumulation and providing the monetary authority with greater capacity to defend the currency.
The weaker spot exchange rate underscored sustained demand for foreign currency from importers, manufacturers and portfolio investors despite the central bank’s liquidity injection.
In the derivatives market, forward contracts reflected mixed expectations over the naira’s medium-term trajectory.
The one-month forward rate weakened 0.7% to N1,400.80/$, while the three-month contract slipped 0.3% to N1,437.39/$, signalling expectations of near-term pressure.
However, sentiment improved over the longer horizon, with the one-year forward contract appreciating 0.6% to N1,598.22/$, suggesting investors expect ongoing policy reforms, stronger reserve buffers and improved FX inflows to support the currency over time.
The six-month contract was unchanged at N1,491.34/$.
Against the British pound, the naira also remained under pressure as sterling continued to trade near multi-year highs against the dollar, increasing the cost of UK imports, overseas education and travel for Nigerian households and businesses.
Based on prevailing global exchange rates, the pound traded at well above N1,850 per pound in the official market, reflecting the combined effect of sterling’s resilience and the naira’s recent depreciation.
In the parallel market, the naira traded weaker than the official rate at around N1,420-N1,440 per dollar, leaving a relatively narrow premium of roughly N35-N55 to the official exchange rate.
The modest spread suggests improved price convergence between both markets compared with the wide gaps seen in previous years, although the persistence of a premium indicates that unmet retail and informal-sector dollar demand continues to sustain activity outside the official market.
Market participants will closely monitor whether the CBN sustains its intervention strategy in the coming weeks, particularly as stronger external reserves provide additional room to smooth exchange-rate volatility.
Analysts expect the trajectory of oil receipts, foreign portfolio inflows and monetary policy to remain key determinants of naira performance in the second half of the year.
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