Naira weakens to 1,541/$

By Joy Baba-Yesufu

The Nigerian naira weakened to N1,541.36/$ on the first day of trading in the New Year.

According to the NFEM rate data available on the website of the Central Bank of Nigeria, this is a 0.36 per cent depreciation compared to the closing rate of 2024 which was N1,535.82/$.

Some authorised dealers quoted the dollar at N1,545/$, an improvement compared to the N1,550/$ quoted on Tuesday while others quoted the naira at N1520/$ at the close of trading on Thursday.

At the parallel market, the naira closed trading at N1,655/$  compared to N1670/$ on Tuesday.

The naira had recorded a 40.9 per cent depreciation in 2024 when compared to the official rate at the close of 2023, which stood at 907.11/$.

The significant depreciation comes amid the CBN’s introduction of several foreign exchange policies aimed at enhancing market transparency and attracting foreign investors.

The latest reform was the introduction of the Electronic Foreign Exchange Matching System which set new guidelines for authorised Foreign Exchange dealers in December. This introduction saw the naira gain some semblance of stability.

Meanwhile, in the money market, the Nigerian Interbank Offered Rate experienced downward movements across all maturities, signalling liquidity in the banking system. However, the Open Repo Rate fell by 0.61 per cent to 26.69 per cent, while the Overnight Lending Rate decreased by 0.55 per cent to 27.25 per cent.

Trading in the secondary market for FGN bonds was subdued, resulting in a slight uptick in the average yield to 19.76 per cent. In Nigeria’s sovereign Eurobonds market, buy pressure across the short, mid, and long ends of the yield curve led to a  6 bps decrease in the average yield to 9.62 per cent.