Naira falls slightly as demand for dollars increases

The Nigerian naira weakened slightly against the US dollar on Friday as demand for foreign currency became stronger than the available supply.

Market data showed that the naira traded between N1,363 and N1,370 per dollar during the day. This happened despite earlier improvements in foreign exchange liquidity.

Experts said the pressure on the naira was mainly caused by foreign investors selling their shares in the Nigerian stock market and converting their money into dollars to take it out of the country.

Many foreign investors sold stocks that had gained value recently, leading to higher demand for dollars and putting pressure on the local currency.

Data from the Central Bank of Nigeria (CBN) showed that some transactions were completed at rates as high as N1,374 per dollar.

Earlier in the trading session, the naira had strengthened to N1,356 per dollar due to increased inflows from foreign investors, exporters, and corporate organisations. However, the gains did not last as demand for dollars increased later in the day.

Other major currencies also gained against the naira. The euro closed at N1,570.93, while the British pound traded at N1,814.10.

Market participants noted that the CBN did not make significant intervention sales during the session, which may have contributed to the naira’s inability to maintain its earlier gains.

Trading activity in the interbank market remained volatile. CBN figures showed transaction volumes ranging from $39.99 million to $184.34 million, reflecting changing levels of market participation and liquidity.

Despite the naira’s weakness, Nigeria’s external reserves continued to rise. According to the CBN, gross external reserves increased to $51.04 billion on June 18, 2026, from $50.96 billion the previous day.

The increase in reserves was supported by earnings from crude oil exports, diaspora remittances, and other foreign exchange sources.

The growing reserves have improved the CBN’s ability to support the foreign exchange market and meet legitimate demand for foreign currency.

Analysts believe the higher reserves have also helped boost investor confidence in Nigeria’s foreign exchange management, even though short-term pressures remain.

Meanwhile, developments in the global oil market created mixed prospects for Nigeria’s foreign exchange earnings.

Oil prices declined during the week after the United States and Iran announced a preliminary agreement aimed at reducing tensions and reopening the Strait of Hormuz. The move eased fears of supply disruptions and reduced the geopolitical factors that had pushed oil prices higher.

If oil prices remain lower for a long period, Nigeria could earn less foreign exchange from crude oil exports. However, the country’s strong reserves and ongoing foreign exchange reforms are expected to help cushion the impact.

Analysts say the naira’s performance in the coming weeks will depend on foreign investor activity, movements in global oil prices, and the CBN’s management of market liquidity.