Naira Slides to N1,375/$1 at Official Market, N1,395/$1 at Parallel Market

The Naira weakened against the United States Dollar across both the official and parallel foreign exchange markets on Tuesday, July 7. At the Nigerian Autonomous Foreign Exchange Market (NAFEX), the local currency lost N7.48 or 0.55 per cent to close at N1,375.75/$1, down from the previous day's rate of N1,368.27/$1.

Official Market Performance

In the same official FX market, the Naira also depreciated against the Pound Sterling by N14.66, trading at N1,841.57/£1 compared to Monday's closing price of N1,826.91/£1. Against the Euro, the local currency fell by N10.61 to close at N1,573.30/€1, down from the preceding session's N1,562.69/€1.

Daily interbank FX turnover stood at $54.180 million across 70 deals, a decline from the previous day's $70.430 million. Updated data showed that gross external reserves increased to $51.525 billion from $51.549 billion.

Parallel Market and CBN Signals

In the parallel market, the Naira lost N5 against the US Dollar during the trading day to settle at N1,395/$1, compared with the previous day's N1,390/$1. At the GTBank forex desk, the rate remained unchanged at N1,831/$1.

Liquidity fluctuations amidst sustained FX inflows from foreign portfolio investors, exporters, non-bank corporates and other sources weakened the Naira despite rising external reserves. The Central Bank of Nigeria (CBN) signalled its intention in the first half of the year to slow the Naira rally and avoid capital flight by purchasing US Dollars from the market.

Cryptocurrency Market Impact

Benchmarked cryptocurrency tokens dipped following renewed strikes on Iran by the US after an attack on commercial ships in the Strait of Hormuz. The US Central Command forces said it began launching a series of powerful strikes against Iran to impose high costs for targeting and attacking commercial shipping crewed by innocent civilians in an international waterway.

For Nigerian businesses and consumers, the continued depreciation of the Naira against major currencies signals persistent pressure on import costs and consumer prices. The CBN's move to buy dollars to manage the currency rally reflects its balancing act between stabilising the Naira and preventing capital flight, which remains a key challenge for the economy.