Naira depreciates further in parallel market amid external reserves depletion

The naira continued its downward trajectory in value, coinciding with a decline in Nigeria’s external reserves.

This comes as banks resumed selling Business and Personal Travel Allowance (BTA/PTA) to customers.

By the close of business on Tuesday, the naira weakened in the parallel market, selling at N1,675 per dollar, a N10 drop from Monday’s rate of N1,665. Similarly, at the Nigerian Foreign Exchange Market (NFEM), the naira depreciated slightly from N1,551 on Monday to N1,552 to the dollar.

The Central Bank of Nigeria (CBN) maintained its intervention in the foreign exchange market, leading to a further depletion of external reserves. Data from the CBN revealed a year-to-date decline of $587.89 million, representing a 1.4% drop.

Starting the year at $40.883 billion, the reserves peaked at $40.92 billion on January 6, 2025, before falling to $40.29 billion by January 17, 2025.

READ ALSO: Naira depreciates against dollar in parallel market

Ugodre Obi-Chukwu, founder and CEO of Nairametrics, forecasted that the naira could stabilize over the course of the year. He predicted a best-case scenario of the currency appreciating to N1,400 per dollar, while the worst-case scenario could see it depreciate further to N1,700.

Meanwhile, banks have recommenced foreign exchange sales for PTA, BTA, and other transactions. First Bank of Nigeria announced that customers could now access forex for school fees, medical bills, student upkeep, and other approved transactions via Form A applications.

The bank emphasized that all applications must be processed through the CBN’s Trade Monitoring System (TRMS) portal, with necessary documents uploaded to ensure a smooth process.