The Nigerian naira has recorded its highest depreciation against the United States dollar, raising fresh concerns about the country’s economic stability. The sharp fall is coming at a time when Nigeria’s foreign reserves are declining, limiting the Central Bank’s ability to defend the local currency in the foreign exchange market.

Market watchers say the drop in reserves has reduced dollar supply, while demand for foreign currency remains high from importers, manufacturers, and investors. This imbalance has continued to put pressure on the naira, leading to weaker performance both at the official window and in the parallel market.

Analysts note that falling oil earnings, external debt obligations, and capital outflows are key factors affecting reserve levels. With fewer buffers to support the currency, the naira has struggled to maintain value, making imports more expensive and fueling inflationary pressures across the economy.

Experts have advised that boosting exports, improving oil production, and restoring investor confidence are critical steps to stabilise the naira. They also stress the need for consistent fiscal and monetary policies to strengthen reserves and protect the economy from further currency shocks.