The naira struggled at the official window in the past week, shedding 1.25 per cent week-on-week to settle at 1536.89/$ on Friday.
According to data from the Central Bank of Nigeria, the Nigerian currency started the week on a weak note at 1,528.03/$, down from 1,517.93/$ in the previous trading session. The naira depreciated further to 1532.93/$ before regaining some strength on Wednesday and Thursday. However, by Friday, it had fallen to 1536.89/$1.
The depreciation occurred amid reports that negotiations on the naira-for-crude agreement between the Nigerian National Petroleum Corporation Limited and local refineries had stalled. However, the parties involved are set to return to the dialogue table this week to sort out their differences with the possibility of extending the contract.
Dangote Petroleum Refinery has already temporarily halted petroleum product sales in naira, citing a currency mismatch. Industry experts and oil marketers warned that the halt in naira sales by the refinery could increase pressure on the foreign exchange market, as dealers would now have to source large amounts of US dollars to purchase petroleum products.
The naira has also continued to struggle despite efforts by the CBN to boost FX supply to banks and Bureaux De Change. However, analysts caution that these interventions may only provide temporary relief without structural reforms to address Nigeria’s prolonged FX challenges.
“Looking ahead, we anticipate a mixed outlook for the naira as demand pressures for the greenback intensify, with FX users and speculators continuing to exploit arbitrage opportunities. Nevertheless, we expect the CBN to sustain its weekly interventions to stabilise the local currency,” experts at Cowry Assets Management Limited said.
At the parallel market, the local currency gained N12 against the dollar, appreciating by 0.77 per cent week-on-week to close at an average of N1,568 per dollar.