Stronger bids overpower supply at NFEM, pushing official reference rates lower amid sustained appetite for greenbacks…..
Nigeria’s foreign exchange market ended the week on a softer footing, as persistent demand for the U.S. dollar outweighed available supply and kept pressure on the naira through Friday’s trading session.
Activity in the market remained brisk, but the tone was clearly one-sided. Dealers reported sustained bids for dollars across trading windows, with limited supply struggling to match appetite. The imbalance tilted the market in favor of the greenback, driving exchange rates higher and the local currency lower by the close.
Data from the Nigerian Foreign Exchange Market (NFEM) showed that the Volume Weighted Average Price (VWAP) weakened by ₦4.97 to settle at ₦1,346.32 per dollar. In the same vein, the Central Bank of Nigeria’s official closing rate depreciated by ₦2.00, ending the session at ₦1,348.00 per dollar.
Market analysts linked the late-session dip to a steady buildup in demand, particularly from corporates and other end-users seeking dollar liquidity before the weekend. With supply flows unable to fully offset this demand, the naira faced renewed downside pressure heading into the close.
Despite the weakness, traders noted that the move was largely driven by routine demand dynamics rather than any abrupt policy shift or macroeconomic shock. In the absence of fresh catalysts, many participants expect the market to trade within a relatively narrow band in the near term.
For now, the direction of the naira will likely remain anchored to the balance between inflows and demand intensity. Should dollar supply improve in the coming sessions, some stability could return. However, if demand continues to outpace inflows, the local currency may remain vulnerable to further marginal depreciation.
As the new trading week approaches, attention will stay fixed on liquidity conditions and policy signals that could shape sentiment in Africa’s largest foreign exchange market.
