Key Points

• Naira depreciation continued despite central bank dollar sales.

• FX intervention failed to meet strong market demand.

• Traders await clearer signals to support currency stability.

The Central Bank of Nigeria put $150 million into the market this week, but the naira kept getting weaker at the official foreign exchange window.

Traders said that demand from importers and businesses was stronger than supply, which caused the currency to fall even though foreign portfolio inflows were helping it.

The official spot exchange rate fell by 10.09 naira to the dollar over the week, with the dollar trading between 1,450.00 and 1,469.90.

Analysts said that the removal of exchange rate distortions and the ongoing intervention by the CBN helped to stabilise things, but the high demand for dollars is still putting pressure on the short term.

The naira keeps losing value even though the CBN is helping

The naira’s drop shows that the market is still under pressure because of structural problems in Nigeria’s FX system. FX traders said the outlook is still cautiously positive, thanks to the central bank’s continued intervention and stronger rules to limit arbitrage opportunities.

Traders said that even with these efforts, demand from importers and investors is still putting a strain on liquidity. This week’s FX volatility shows how sensitive the naira is to both domestic economic policies and global financial flows.

The currency is affected by external reserves and the oil market

Last week, Nigeria’s external reserves fell by $263.15 million to $45.21 billion, ending a two-month rise. Analysts said that the drop was caused by actions taken by the central bank and lower oil revenues.

Oil prices also went down, even though they went up for a short time on Friday because people were worried about the US blocking Venezuelan shipments. Brent crude futures for February settled at $59.47 per barrel, which is 65 cents or 1.06 percent less than the previous week. West Texas Intermediate lost 92 cents and closed at $55.52 per barrel. Weak crude prices keep hurting FX inflows, which makes it harder for the naira to get support.

Gold goes up as investors look for a safe place to put their money

Gold, on the other hand, went up because people wanted a safe place to put their money during times of economic uncertainty. Spot gold went up 0.84 percent to 4,338.55 dollars per ounce, even though the US dollar was strong and Treasury yields were higher.

Analysts think that cautious sentiment will continue next week, which will help gold as investors protect themselves against lower US inflation and ongoing global instability. At the same time, oil prices may stay unstable as markets weigh the risks of oversupply, geopolitical events, and supply issues.

The naira’s path shows that Nigeria’s foreign exchange market still has structural problems. In the short term, demand pressures, oil revenue volatility, and policy changes will all affect currency movements.