The Nigerian naira continued its downward slide on Tuesday, weakening further against the United States dollar in both the official and parallel markets.
At the parallel market, traders in Lagos and Abuja quoted the naira between ₦1,640 and ₦1,670 per dollar, marking one of its weakest levels in recent weeks. At the official Investors’ and Exporters’ (I&E) window, the currency also slipped, closing at ₦1,615/$1, according to data from the FMDQ Exchange.
The sustained pressure on the naira is attributed to a combination of factors, including dwindling foreign exchange reserves, rising import bills, and persistent dollar demand from businesses and individuals.
Economic analysts say the Central Bank of Nigeria (CBN) faces tough choices as it attempts to stabilize the exchange rate while balancing inflationary pressures. Nigeria’s inflation rate stood at over 31% in July, one of the highest in decades, fueled by the removal of fuel subsidies and rising food prices.
“The market is still experiencing a dollar liquidity crunch, and this is driving the parallel market rates higher,” noted financial analyst Adeola Adedoyin. “Unless there is a significant boost in forex inflows, we may continue to see the naira under pressure.”
The federal government has assured that ongoing reforms—including attracting foreign investments, boosting oil production, and stabilizing the energy sector—will eventually ease the strain on the currency. However, many Nigerians remain concerned about the immediate impact on the cost of living, with prices of imported goods and services rising daily.