The naira weakened to ₦1,483/$ on Wednesday as traders rushed to buy dollars for the festive season.
Meanwhile, the official NFEM reported the dollar at ₦1,454.38/$ on Tuesday, rising from ₦1,448.43/$ Monday.
Naira Slips Amid Festive Dollar Rush
Consequently, importers and retailers increased their dollar purchases to prepare for Christmas and New Year sales.
Furthermore, rising overseas travel and school fees boosted demand in Nigeria’s parallel foreign exchange market.
Although the naira remained stable in late November, recent trading reversed its earlier gains this week.
Fed Policies Strengthen The Dollar
Additionally, a “hawkish” US Federal Reserve attracted investors to the dollar, causing capital outflows from Nigeria.
As a result, businesses front-loaded foreign exchange obligations, exerting continuous pressure on the local currency.
Thanks to CBN interventions, diaspora remittances, and FX reforms, the naira appreciated about 5.7% year-to-date.
Consequently, the currency stabilised between ₦1,450–₦1,470/$ in early December despite strong global USD pressures.
Meanwhile, markets expect a 25-basis-point Fed rate cut, but hawkish officials resist because inflation remains high.
Read Also: Naira Set To Climb To ₦1,445/$ As Fed Signals Rate Cuts
For instance, Kansas City Fed President Jeffrey Schmid called US inflation “too high” for immediate cuts.
Similarly, Dallas Fed’s Lorie Logan and Cleveland’s Beth Hammack recommended pausing additional reductions.
Moreover, up to five FOMC members oppose further rate cuts at the December meeting.
Global Data Shapes Local Market
In October, US job openings rose to 7.67 million, exceeding analysts’ projections of 7.20 million.
Therefore, strong employment data encouraged caution on aggressive rate cuts, supporting USD strength.
Meanwhile, the US Dollar Index (DXY) trades flat at 99.20 after yesterday’s gains and investor caution.
Furthermore, global bond yields climbed to 2009 levels, signalling potential ends to global rate-cutting cycles.
Earlier this year, the Fed cut rates to counter weaker employment, including rising US unemployment.
For Nigeria, traders and importers understand that the naira’s stability depends on CBN actions, domestic demand, and global pressures.
Finally, year-end FX demand continues to influence markets, keeping investors vigilant as the festive season approaches.
