Naira depreciated against dollar as official market returns to bearish trend

The Naira depreciated against dollar at the official foreign exchange market on Tuesday, reversing gains recorded a day earlier.

Data released by the Central Bank of Nigeria (CBN) showed the naira closed at N1,370.64 per dollar, compared with N1,369.11 per dollar on Monday.

This means the Naira depreciated against dollar by N1.53 on a day-to-day basis, signalling a return to bearish territory at the official market.

However, the parallel market remained stable. Traders exchanged the naira at N1,400 per dollar on Tuesday, unchanged from the rate recorded a day earlier.

The latest movement comes despite an increase in Nigeria’s foreign reserves. Official figures showed the country’s external reserves rose further to $51.14 billion on Monday.

Meanwhile, the development highlights the continued volatility in Nigeria’s foreign exchange market. Although the local currency strengthened on Monday, it failed to sustain the momentum and weakened again on Tuesday.

Analysts say market participants will continue to monitor foreign reserve levels and policy measures by the CBN to determine the direction of the exchange rate. For now, the Naira depreciated against dollar, while the black market rate remained unchanged.