Naira wobbles after Sallah, Democracy Day breaks, dips against the Dollar

By Grace Alegba

The Naira ended the trading week on a bearish note, closing at N1,549.35 per U.S. dollar at the official foreign exchange market on Friday, reflecting growing market volatility following the Sallah and Democracy Day holidays.

According to data from the Central Bank of Nigeria (CBN), the local currency lost N9.63 against the dollar compared to its last recorded rate of N1,539.72 on Wednesday, June 11.

This represents a 0.6 per cent depreciation of the Naira, underscoring renewed pressure on the foreign exchange market.

Prior to the public holidays, the Naira had experienced brief gains. On Tuesday, June 10, it traded at N1,540.04, appreciating by 0.8 per cent from N1,553.11 recorded on Thursday, June 5. However, the temporary gains were reversed after the market reopened post-Democracy Day.

The market closures caused by the Eid-el-Kabir (Sallah) holiday from Friday, June 6 to Monday, June 9, and the June 12 Democracy Day holiday, created intermittent trading windows that contributed to the week’s erratic currency performance.

Analysts believe the interruptions limited liquidity and inflows, contributing to the volatility.

Since December 2024, the Naira had shown signs of relative stability due to tighter monetary policies and improved FX management by the apex bank.

However, this week’s dip may indicate renewed demand-side pressures or speculative activity, particularly as importers and investors resumed transactions after the holiday break.

Economists warn that the latest dip, though marginal, underscores the need for sustained reforms to boost forex inflows, including attracting foreign direct investment and improving export competitiveness.