The Nigerian naira has experienced a notable depreciation against both the US dollar and the pound sterling during the latest trading session, while it has managed to gain value against the euro. As of October 12, the official exchange rate for the naira fell to N1,332.09 per dollar, down from N1,331.19 per dollar recorded on the previous trading day, marking a loss of 90 kobo or 0.07%.

In addition to its decline against the dollar, the naira also weakened against the pound sterling, closing at N1,762.63 per pound compared to N1,759.16 per pound in the preceding session, reflecting a decrease of N3.47. Conversely, the local currency appreciated against the euro, rising by N1.64 to finish at N1,489.15 per euro, up from N1,490.79.

At the GTBank foreign exchange desk, the naira saw a slight recovery against the dollar, gaining N2 to close at N1,338 per dollar, while the parallel market remained stable at N1,360 per dollar.

The Central Bank of Nigeria (CBN) reported a significant drop in interbank foreign exchange turnover, which fell by 77.7% to $36.24 million from $162.74 million in the previous session. Despite this decline, Nigeria's net foreign reserves have increased, now standing at $46 billion. This rise in reserves is attributed to growing private capital inflows, which bolster the CBN's ability to intervene in the foreign exchange market as needed.

As the festive season approaches in December, importers are expected to ramp up demand for foreign currency, which could further impact the naira's performance. Last week, dollar transactions surged to $3.37 billion, a significant increase from $1.70 billion the week before, with spot transactions accounting for much of this growth.

Analysts from Cordros Securities have indicated that the near-term outlook for foreign exchange inflows will hinge on the resilience of foreign portfolio investments and a recovery in domestic dollar supply. They emphasized that sustained foreign investment and improved dollar supply will be crucial in determining the naira's trajectory in the coming weeks.

In related news, the International Monetary Fund (IMF) has highlighted the challenges faced by Nigerians due to rising living costs. The organization has urged the federal government to implement targeted cash transfers and temporary income support for vulnerable households to alleviate poverty and enhance food security amid escalating food and energy prices.