Despite growing foreign reserves, naira depreciates to N1,512

The naira has maintained steady decline for two weeks while the nation’s external reserves continue to climb. Exchange rates at informal currency market and official rates plunged into deadly spiral after the apex bank’s FX intervention sales.

Having depreciated by more than 40 per cent year to date, the naira extended losses against the US dollar as forex liquidity challenge persists. According to FMDQ forex spot rate data, the naira depreciated by 21bps or 0.21per cent to N1,512.61 in the Nigerian Autonomous Foreign Exchange Market (NAFEM).

Meanwhile, data from the Central Bank of Nigeria (CBN) showed that foreign reserves climbed further to $34.432 billion on Tuesday.

The CBN has said the authority will not defend the naira in the official window since it floated the local currency, in a nation that depends on imports to survive. The apex bank has limit FX liquidity levels in the official window, causing the exchange rate to run amok.

According to Marketforces,, the foreign exchange market saw pressure on the naira from speculative activities and rising demand, causing the naira to weaken against the US dollar across market segments. In the parallel market, the naira depreciated by 0.60 per cent, ending the day at an average of N1,514 per US dollar, according to channel check.