Naira falls to N1,373/$, hits weakest level in four weeks

The Nigerian naira weakened further against the United States dollar on Tuesday, closing at N1,373/$ at the official foreign exchange market, its lowest level in four weeks, as renewed strength in the greenback continued to weigh on emerging-market currencies.

Latest figures published by the Central Bank of Nigeria (CBN) showed that the local currency depreciated from N1,369/$ recorded on Monday, extending a downward trend that has persisted through the second half of June.

The latest exchange rate marks the naira’s weakest official-market close since May 26, 2026, when it settled at N1,374/$.

Market data indicate that the naira has steadily surrendered gains achieved earlier in the month, falling by N17 against the dollar within eight trading sessions.

The currency had strengthened to N1,356/$ on June 15, raising hopes of sustained stability following months of relative calm in the foreign exchange market.

However, the naira subsequently began a gradual decline, closing at N1,361.5/$ on June 17 before weakening further to N1,365.5/$ on June 18.

The downward trend continued with the currency settling at N1,371.5/$ on June 19, recovering slightly to N1,369/$ on June 22, before slipping again to N1,373/$ on June 23.

The latest depreciation leaves the naira just one naira short of the N1,374/$ level recorded in late May, underscoring growing pressure on the domestic currency despite recent improvements in Nigeria’s external accounts.

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Analysts attribute the latest weakness largely to developments in international financial markets, where the U.S. dollar has regained momentum amid expectations that the Federal Reserve may maintain a tighter monetary policy stance for longer.

The U.S. Dollar Index, which measures the strength of the dollar against a basket of major currencies, rose by 0.38 percent to 101.39, reaching its highest level since May 2025.

The euro also came under pressure, declining to approximately $1.138, its weakest level in more than a year.

Market sentiment was influenced by comments from Chicago Federal Reserve President Austan Goolsbee, who reiterated that inflation remains a key concern for policymakers despite resilience in the U.S. labour market.

Meanwhile, the Japanese yen traded near 161.55 per dollar, hovering close to levels that previously sparked concerns about possible intervention by Japanese authorities.

The broad-based strength of the dollar has placed additional pressure on currencies across emerging and frontier markets, including Nigeria’s naira.

Financial economist and market analyst, Mallam Muftau Yusuf of Kwik Securities Limited, said the current global environment naturally favours dollar-denominated assets and poses challenges for developing economies.

“When global investors move toward dollar-denominated assets because of higher U.S. yields, emerging market currencies tend to face pressure. Nigeria is not insulated from these global developments,” Yusuf explained.

According to him, movements in the global currency market continue to influence capital flows, investor sentiment and demand for foreign exchange in countries such as Nigeria.

The naira’s recent decline comes despite significant gains in Nigeria’s external reserves, which have climbed to their highest level in more than a decade.

Official data show that the country’s foreign reserves recently exceeded $51 billion, the strongest position recorded since 2009.

The reserves increased by more than $1 billion during the first half of June 2026, supported by stronger foreign exchange inflows and improved market confidence.

The development reflects the impact of ongoing reforms in the foreign exchange market, improved oil earnings and increased capital inflows.

The Central Bank of Nigeria has continued to pursue reforms aimed at improving liquidity, transparency and investor confidence in the foreign exchange market.

The apex bank has maintained a relatively stable exchange-rate management framework in recent months, helping to moderate volatility despite occasional external shocks.

In its economic outlook for 2026, the CBN projected that Nigeria’s external reserves would rise to approximately $51.04 billion, supported by stronger export earnings, foreign investment inflows and continued reforms in the foreign exchange market.