The naira closed at its weakest level since August as Nigeria’s external reserves climbed to $58.81 billion and international financial institutions raised their economic growth forecasts.
Nigeria’s naira weakened further against the US dollar on Tuesday, October 13, closing at N1,335.50 per dollar as pressure on the foreign exchange market persisted despite an increase in the country’s external reserves.
Data from the Central Bank of Nigeria (CBN) showed that the currency depreciated from N1,332.99 per dollar on October 12, losing N2.51 in a single session.
The latest closing rate matches the level recorded on August 31, making it the naira’s weakest close since that date. The movement followed several sessions in which the currency traded within a relatively narrow range.
Naira Extends October Losses
The naira’s recent performance has reflected gradual weakening after relatively modest movements earlier in October.
CBN data showed that the currency closed at N1,333.55 per dollar on October 8 before strengthening to N1,332.49 on October 9. It then weakened to N1,332.99 on October 12 before falling further on October 13.
During Tuesday’s trading, the exchange rate ranged between N1,332 and N1,336 per dollar.
The latest decline highlights the continuing fluctuations in the foreign exchange market, even as Nigeria records improvements in some external economic indicators.
Foreign Reserves Reach Highest Level Since 2008
The naira’s depreciation comes amid a significant increase in Nigeria’s foreign exchange reserves.
The country’s reserves reached $58.81 billion on October 12, their highest level since November 2008, when they stood at approximately $58.91 billion.
Nigeria’s net foreign reserves have also increased to $46 billion, according to figures reported earlier in October.
CBN Governor Olayemi Cardoso has said that improved stability in the foreign exchange market is helping to strengthen investor confidence.
However, rising reserves do not automatically result in an immediate appreciation of the naira. Exchange rates are also influenced by foreign currency demand and supply, market expectations and other economic conditions.
The latest figures therefore present a mixed picture: Nigeria’s external reserves have strengthened, but the naira has continued to face short-term pressure.
IMF Raises Nigeria’s Growth Forecast
The currency’s latest decline also comes as the International Monetary Fund (IMF) improves its outlook for the Nigerian economy.
The IMF raised its forecast for Nigeria’s economic growth in 2026 to 4.2%, while projecting growth of 4.3% in 2027.
The revised outlook suggests expectations of stronger economic activity, although it does not eliminate concerns about exchange-rate movements and their effects on businesses and households.
The World Bank has also upgraded its projections, forecasting that Nigeria’s economy will grow by 4.3% in 2026, compared with 4.0% in 2025. It expects growth to reach 4.4% in both 2027 and 2028.
These projections offer a more positive assessment of Nigeria’s growth prospects, even as currency performance remains a major concern for the economy.
Currency Stability Remains a Key Concern
The naira’s return to its weakest closing level since August underscores the difference between improving reserve levels and movements in the daily exchange rate.
While stronger external reserves can support confidence in Nigeria’s ability to meet foreign currency obligations, sustained currency stability also depends on conditions in the foreign exchange market.
For businesses that rely on imported goods and services, further depreciation could increase costs if it persists. Consumers may also face additional pressure as higher import costs feed into domestic prices.
The coming sessions will show whether the latest decline marks a temporary fluctuation or the beginning of a more sustained weakening of the naira.
Source: Nairametrics
I hope we can have ₦1000 to $1 by December