Naira Records Highest Single‑Day Depreciation Against US Dollar
The Nigerian naira has recorded its worst single‑day decline against the United States dollar, reflecting continued pressure on the local currency amid foreign exchange market volatility.
On Tuesday, the naira weakened sharply at the Investors and Exporters (I&E) forex window, sliding by more than its usual trading range to reach a record low against the dollar.
Forex traders and analysts attributed the sudden plunge to renewed dollar demand from key sectors, reduced foreign portfolio inflows, and lingering confidence challenges in the foreign exchange market.
“The naira’s sharp depreciation today reflects persistent dollar demand pressures and limited supply,” said a forex dealer operating at a leading bank in Lagos.
The Central Bank of Nigeria (CBN) is yet to issue a public statement on the latest depreciation, but market watchers believe policymakers may consider intervention measures if the trend persists.
Impact on Prices, Businesses
Economists warn that the naira’s sharp fall could further fuel import costs, potentially driving up prices of essential goods and services, including food items and foreign‑priced commodities.
Businesses that rely on imported inputs are expected to feel the impact quickly, with manufacturers likely to pass increased costs to consumers.
Market Reaction
The fall also triggered heightened activity at forex bureaux, with some reporting longer queues as individuals and small traders sought to access dollars ahead of expected further weakness in the naira.
Analysts say that continued depreciation may put additional pressure on Nigeria’s inflation rate, which has remained elevated in recent months.
Outlook
Foreign exchange experts, however, noted that the naira’s recent slide could stabilise if dollar supply improves, particularly through export receipts, diaspora remittances, and foreign investment inflows.
For now, the record depreciation underscores ongoing challenges in Nigeria’s forex markets and highlights the need for sustained policy measures to boost confidence and currency stability.