The naira depreciated against the United States dollar at the official foreign exchange market during the week ended Friday, July 10, closing at N1,381.70/$1 despite a continued rise in Nigeria’s external reserves, which climbed to $51.74 billion. The latest exchange rate represents a weekly loss of N11.70 or 0.85 per cent from N1,370/$1 recorded a week earlier.
Data from the Central Bank of Nigeria (CBN) showed that the local currency came under sustained pressure throughout the week, losing value on four of the five trading sessions. It opened the week at N1,371/$1 on Monday before weakening to N1,379/$1 on Tuesday. The exchange rate remained unchanged on Wednesday, edged lower to N1,379.25/$1 on Thursday, and closed at its weakest level of the week on Friday at N1,381.70/$1.
Trading activity in the Nigerian Foreign Exchange Market (NFEM) fluctuated during the review period. Total turnover stood at $220.18 million on Monday, increased to $423.02 million on Tuesday and peaked at $504.67 million on Wednesday before easing to $298.92 million on Thursday. Interbank market turnover also varied, rising from $54.18 million on Monday to $208.09 million on Wednesday before dropping to $78.71 million on Thursday and $71.04 million on Friday.
Despite the currency’s decline, Nigeria’s gross external reserves continued their upward trajectory, reaching $51.74 billion as of July 9. The reserve level reflects an increase of about $217.7 million from the previous week’s $51.52 billion, extending the country’s recent gains in foreign exchange buffers following stronger inflows and improved market conditions.
Analysts, however, caution that the improved reserve position may not be enough to guarantee long-term exchange rate stability. According to EBC Financial Group, the recent growth in reserves has largely been driven by cyclical portfolio inflows, which could reverse if global market conditions weaken. The firm noted that sustaining the current reserve level would depend on Nigeria’s ability to attract long-term investments, maintain robust oil earnings and preserve investor confidence in the naira.
