Experts warn of further volatility as Naira weakens against Dollar

The Nigerian naira continued its downward trajectory against the US dollar at the official foreign exchange market on Monday, despite recent policy interventions by the Central Bank of Nigeria (CBN).

According to data from the CBN, the naira depreciated to N1,530.15 per dollar on Monday, marking a decline from N1,517.24 recorded last Friday. This represents a loss of N12.91 in a single trading session at the official market.

Meanwhile, in the parallel (black) market, the naira remained stable at N1,580 per dollar, the same rate as recorded last Friday, indicating a widening gap between the official and unofficial exchange rates.

Economic analysts have raised concerns about the continued pressure on the naira despite the CBN’s aggressive interventions. The Chief Executive Officer of Financial Derivatives, Bismark Rewane, disclosed that the apex bank had spent approximately $8 billion in recent months trying to defend the naira against further depreciation.

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“The CBN’s efforts to stabilize the naira have been costly, yet the results remain underwhelming,” Rewane said. “The continuous depletion of foreign reserves in a bid to prop up the currency raises concerns about sustainability.”

Financial analysts and economists warn that unless structural issues such as dollar supply constraints, inflationary pressures, and declining foreign reserves are addressed, the naira may continue to experience volatility.

Speaking on the development, financial analyst and economist Dr. Muda Yusuf stated, “The persistent depreciation of the naira suggests that there is still a significant imbalance between foreign exchange demand and supply. Policy interventions need to be complemented by real economic reforms that attract foreign investment and boost export earnings.”

As Nigeria grapples with ongoing forex challenges, investors and businesses remain on high alert, closely monitoring further developments in the foreign exchange market.

Market watchers suggest that the CBN may need to adopt more sustainable measures beyond short-term interventions to achieve long-term currency stability.