Naira depreciates against dollar amid GDP growth

Naira recorded a marginal depreciation against the dollar at the official foreign exchange market, starting the week on a bearish note despite ongoing economic growth and a significant rise in Nigeria’s external reserves.

According to data from the Central Bank of Nigeria (CBN), the naira weakened slightly to ₦1,488.60 per dollar on Monday, down from ₦1,487.90 traded on Friday, marking a drop of ₦0.70.

In contrast, the naira remained stable in the parallel market, maintaining an exchange rate of ₦1,522 per dollar — unchanged from the previous Friday, when it had shown relative strength against other foreign currencies.

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This slight decline in the official rate comes even as the country’s external reserves climbed to a six-year high of $42.03 billion as of September 19, 2025.

The increase in reserves, typically a positive indicator for currency strength, suggests improved foreign earnings, possibly driven by oil exports or inflows from remittances and investments.

However, the naira’s depreciation highlights persistent challenges in the foreign exchange market, including demand pressures and limited dollar supply, despite broader economic gains.

Market watchers remain cautious, noting that the benefits of growing reserves and GDP expansion may take time to translate into sustained currency stability.