Naira Weakens Across FX Windows as Dollar Demand Rises, Market Liquidity Thins
STORY; WRITTEN MYRA NOVEMBER 6,2025
The naira continued to struggle across multiple foreign exchange (FX) markets on Wednesday, slipping further as dollar supply thinned and demand picked up.
Figures released by the Central Bank of Nigeria (CBN) showed that the naira depreciated by 0.3% in the official Nigerian Foreign Exchange Market (NFEM), closing at N1,438.49/$1, weaker than N1,433.65/$1 recorded on Tuesday.
In the parallel (black) market, the local currency also lost ground, sliding by N20 to finish at N1,460/$1, representing a 1.4% fall from the previous rate of N1,440/$1.
For international payments via the GTBank naira card, the exchange rate ended Wednesday at N1,446/$1, slightly weaker than N1,443/$1 recorded a day earlier.
Despite the currency pressure, Nigeria’s external reserves remain on the rise. CBN data indicates the reserves increased to $43.27bn as of November 4, 2025.
However, inflows into the NFEM slowed sharply last week. A report from Coronation Merchant Bank showed that FX inflows dropped to $1.04bn, down from $1.37bn the previous week.
Foreign portfolio investors (FPIs) were still the biggest contributors, accounting for 62.3% ($645.4m) of total inflows. Exporters contributed 15%, non-bank corporates 11.6%, foreign direct investment (FDI) 1.9%, and other sources 9.2%.
This latest dip in the naira follows a turbulent start to the week.
On Monday, the currency fell 1.0% in the official market after former U.S. President Donald Trump made controversial remarks about Nigeria, triggering uncertainty among investors.
According to Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co., Trump’s comments rattled both currency and bond traders:
“Even in the bond market, we saw a drop. It’s largely because of the Trump pronouncement.”
Olubunmi noted that such reactions are typical, as markets often respond sharply to political tension. However, he believes the impact will not last.
“The market will settle. This is Trump’s style — bold statements, some temporary disruption, and then things normalize, often without real consequences.”
By Tuesday, the naira briefly clawed back some losses as traders appeared to ignore the political noise. But the rally was short-lived, as fresh dollar demand and reduced liquidity dragged the currency down again on Wednesday.
