Naira Weakens to Four-Month Low as Dollar Climbs Above N1,380

The Nigerian naira has slipped to its weakest level in nearly four months, reflecting renewed pressure in the foreign exchange market despite ongoing efforts by the Central Bank of Nigeria (CBN) to stabilize the local currency.

Data released by the CBN showed that the dollar closed at N1,383.63 at the Nigerian Foreign Exchange Market (NFEM) on Monday, marking the first time the exchange rate has traded above the N1,380 threshold since April 7, 2026, when it settled at N1,386.66.

The latest movement also represents a slight day-on-day depreciation of N2.70 from the N1,380.93 recorded on Friday, highlighting continued volatility in the foreign exchange market.

Compared with the naira's strongest performance this year, the local currency has depreciated by N42.28, or 3.06 percent, from N1,341.35 recorded on February 19, 2026.

The weakening of the naira comes amid sustained demand for foreign exchange from importers, manufacturers, investors, and other market participants, even as authorities continue implementing reforms aimed at improving liquidity and enhancing transparency in the FX market.

Exchange rate stability remains one of the key priorities of the Central Bank, given its direct impact on inflation, business costs, foreign investment, and consumer purchasing power. A weaker naira typically increases the cost of imported goods, industrial raw materials, machinery, and essential commodities, placing additional pressure on businesses and households.

Analysts note that while the recent depreciation remains relatively moderate compared to previous periods of sharp currency volatility, it underscores the delicate balance between foreign exchange supply and demand in Africa's largest economy.

Market participants will continue to monitor the CBN's policy actions, foreign exchange inflows from oil exports, diaspora remittances, foreign portfolio investments, and broader macroeconomic developments, all of which play a significant role in determining the direction of the naira.

Despite the recent setback, economic observers believe that sustained reforms, improved foreign exchange liquidity, increased non-oil exports, and stronger investor confidence will be critical to achieving long-term exchange rate stability.

As Nigeria continues its broader economic reform agenda, the performance of the naira will remain a key indicator of market confidence and macroeconomic resilience, with businesses and investors closely watching developments in the country's foreign exchange market.