Naira Slips Against US Dollar as Bonny Light Crude Drops 6%
The naira slipped against the US dollar as a 6% weekly drop in Bonny Light tightened inflows from hydrocarbon FX receipts, keeping Nigeria’s external reserves balance below $49 billion.
The local currency recorded a mild depreciation against the US dollar at the official window over the last 5 trading sessions, reflecting continued pressure in the domestic foreign exchange market despite ongoing policy tightening by the Central Bank of Nigeria.
In the official market, the naira weakened by 0.32% week-on-week to close at ₦1,375.46/USD, while the parallel market also eased by 15 basis points to ₦1,370.12/USD, indicating broadly aligned but slightly divergent pricing dynamics across segments.
Supported the latest round of FX inflows, Nigeria’s external reserves recorded a marginal improvement, rising by 0.05% to $48.72 billion. The modest reserve accretion was boosted by oil sales inflows and relatively contained FX demand pressures.
Oil prices traded on a firmer note, supported by renewed geopolitical optimism surrounding potential progress in US–Iran negotiations, despite lingering unresolved sticking points.
Brent crude futures rose 1.56% to $104.00 per barrel, while West Texas Intermediate (WTI) advanced 1.25% to $98.75 per barrel during early Asian trading.
However, Nigeria’s Bonny Light crude moved in the opposite direction, declining by 5.99% to settle at $116.92 per barrel, reflecting grade-specific pricing dynamics and differential demand conditions in the global crude market.
Oil prices continued to support FX conditions with Brent crude averaging USD103.70/bbl in March and USD120.40/bbl in April. Nigeria’s gross external reserves remained broadly stable but with a slight downward bias, declining marginally from the 2009 high of $50 billion before it began to pick up.
This suggests that stronger FX inflows from oil receipts may have been partly offset by continued intervention activity and debt repayments. The exchange rate has remained below the N1,400/USD threshold at the official window, indicating a relatively contained but still fragile FX environment.
Meanwhile, the spread between the official and parallel market rates narrowed significantly, declining from an average of N67.48/USD in January to N26.38 per dollar.
FX analysts said they expect the naira to remain under mild pressure in the near term due to persistent US dollar demand, though rising external reserves could help cushion volatility. NGX Dips by N366bn as Investors Paint Broad Street in Red
