Nigeria’s local currency, the naira, weakened further at the close of trading on Friday, settling at N1,398 per dollar, as persistent foreign exchange liquidity challenges continued to weigh on the market.
Data released by the Central Bank of Nigeria showed that the naira traded within a band of N1,404/$ to N1,398/$ during Friday’s session, while the simple average exchange rate settled at N1,394.55 per dollar.
The latest closing rate represents the weakest level recorded by the currency since January 28, 2026, when it closed at N1,394/$, underscoring the sustained pressure on Nigeria’s foreign exchange market.
Throughout the week, the naira recorded losses in most trading sessions.
The currency began the week at N1,376/$ on Monday before depreciating to N1,390/$ on Tuesday. It recorded its only gain on Wednesday, appreciating slightly to N1,382/$.
However, the brief recovery proved temporary as the naira resumed its downward trajectory, weakening to N1,388/$ on Thursday and closing the week at N1,398/$ on Friday.
The recent decline also extends a broader depreciation trend that began in mid-February. From N1,337/$ recorded on February 17, the currency has steadily weakened in subsequent trading sessions.
Market analysts attribute the naira’s slide primarily to persistent foreign exchange liquidity constraints and speculative trading activity in the market.
Reports by Nairametrics indicate that limited dollar supply continues to place pressure on the local currency, while the gap between the official and parallel foreign exchange markets has also influenced trading behaviour.
Economists note that the imbalance between demand and supply of foreign currency remains a key driver of exchange rate volatility in Nigeria.
Despite the weakening currency, the Central Bank of Nigeria has pointed to improvements in the country’s external reserves position.
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The CBN Governor, Olayemi Cardoso, recently disclosed that Nigeria’s net foreign exchange reserves rose to $34.80 billion at the end of 2025, while gross reserves climbed to $50.45 billion as of February 2026.
According to the apex bank, stronger oil revenues and improved foreign currency inflows could help sustain reserve levels and support the naira over the medium term.
External developments have also contributed to the pressure on the naira. The U.S. dollar has strengthened to a three-month high amid renewed geopolitical tensions in the Middle East, putting additional strain on emerging market currencies.
The global dollar rally was evident earlier in the week when the U.S. Dollar Index climbed nearly 1 percent, marking its strongest single-day gain in seven months as investors sought safer assets.
Projections contained in the Central Bank of Nigeria 2026 Macroeconomic Outlook suggest that Nigeria’s external reserves could increase further to $51.04 billion in 2026, largely supported by higher oil export earnings.
Financial analysts say that while the naira has recently shown signs of relative stability compared with the sharp volatility witnessed in previous years, the currency remains vulnerable to domestic liquidity challenges and global economic uncertainties.