The naira weakened marginally at the official foreign exchange market on Friday, closing at N1,372/$ as investors adopted cautious positions ahead of next week’s Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN).
Data published on the CBN website showed the local currency depreciated by N8 week-on-week, compared to last Friday’s closing rate of N1,364/$.
Despite the decline, the naira traded within a relatively narrow range throughout the week, indicating reduced volatility in the foreign exchange market compared to earlier periods marked by sharp swings.
A review of trading activities showed the naira exchanged at N1,371/$ on Thursday, N1,368.95/$ on Wednesday, N1,373/$ on Tuesday, and N1,375/$ on Monday, reflecting mild but persistent pressure on the currency.
In the previous week, the naira traded at N1,358.01/$ on Thursday, N1,361/$ on Wednesday, N1,362/$ on Tuesday, and N1,367/$ on Monday before settling at N1,364/$ on Friday.
Meanwhile, Nigeria’s external reserves rose slightly to $48.54 billion on May 14, 2026, from $48.45 billion recorded on May 11, representing an increase of about $93.9 million.
The modest reserve accretion provided limited support for the local currency, although the CBN has yet to explain the reason behind the increase.
Market attention is now focused on the 305th MPC meeting scheduled for next week, with investors watching closely for signals on interest rates and the broader monetary policy direction.
Historically, the naira has recorded mixed performances ahead of MPC meetings, depending on market expectations and anticipated policy decisions.
Ahead of the 304th MPC meeting in February 2025, the naira weakened slightly to N1,353.5/$ amid cautious investor sentiment. However, the currency recorded modest gains before the 303rd MPC meeting in November as confidence improved around expected policy measures.
At its last meeting, the CBN reduced the Monetary Policy Rate (MPR) by 50 basis points to 26.5% from 27%, marking the apex bank’s first easing move after a prolonged tightening cycle.
The decision reflected a more cautious monetary policy stance as the CBN sought to balance inflation concerns with slowing economic growth and mounting pressure from businesses seeking lower borrowing costs.
Nigeria’s headline inflation rate rose to 15.69% in April 2026, up from 15.38% recorded in March.
Earlier this week, Nairametrics reported that Nigeria’s external reserves declined by about $855 million within five weeks, dropping from $49.18 billion on April 1, 2026, to $48.33 billion as of May 7, 2026.
Before the foreign exchange reforms introduced under President Bola Ahmed Tinubu, Nigeria operated a tightly managed FX regime in which the central bank played a dominant role in supplying foreign currency and maintaining multiple exchange rate windows.
