Naira Nosedives to Record Low Amid Major Drop in Dollar Supply

The naira experienced a significant drop against the U.S. dollar at the start of the week, with currency rates sliding in both the official and parallel foreign exchange markets. This decline comes amid a steep reduction in FX supply, highlighting ongoing pressures in Nigeria’s currency markets.

According to FMDQ data, the naira fell to N1,670.65 per dollar on Monday, down from Friday’s exchange rate of N1,600 per dollar—a depreciation of N70.65. In the parallel market, the naira also weakened, dropping to N1,746 per dollar, compared to N1,740 last week.

The decline is closely tied to a substantial decrease in foreign exchange turnover, which fell from $284.93 million on Friday to just $81.17 million on Monday. This decrease in transaction volumes signals a tightening in FX supply, adding further strain to the naira’s value.

Analysts warn that the continued decrease in FX supply could exert more pressure on the naira in the days ahead, potentially impacting import costs and inflation in Nigeria.