Naira Weakens on Rising U.S Dollar Outflow, FX Reserves Top $49bn
The Nigerian naira declined across foreign currency markets due to surging demand for the US dollar, the Euro and the Sterling. Daily FX data released by the Central Bank of Nigeria (CBN) showed that the local currency closed the trading session at ₦1,375.4073 per US dollar, up from ₦ 1,374.9172 the previous day.
The pressure mounted on increased demand for hard currency, which eclipsed the total dollar volume available for transactions at the official window. The CBN daily FX report showed that the spot rate hovered between N1375 and N1376.9900 per dollar during the trading session.
Interbank FX turnover increased to $73.598 million across 110 deals, according to an official report released by the authority. This indicated a significant rise from $55.786 million that passed through local banks’ records the previous day.
The naira outlook remains stable, analysts said, citing the latest round of FX inflows, which have lifted gross external reserves to $49.259 billion.
A slew of Broad Street analysts maintained that the naira will close the first half of 2026 stronger as the CBN continues to inject FX inflows into the official market.
Naira bulla anchored a positive exchange rate outlook on a significant increase in FX receipts from elevated oil prices in the global commodity market.
Brent crude oil prices rose on Tuesday as U.S. strikes in southern Iran and President Donald Trump’s mixed messaging on talks between Tehran and Washington kept traders on edge.
Brent crude futures, the international benchmark, gained more than 3% to close at $99.58 a barrel, up from Monday’s settlement.
West Texas Intermediate futures, which did not close Monday due to the three-day Memorial Day holiday, fell nearly 3% to settle at $93.89 per barrel compared with Friday.
WTI bounced back Tuesday from session lows in the wake of the U.S. military strikes. Brent and WTI are both lower compared to their Friday settlements, after Trump signalled over the weekend an imminent deal with Iran to open the Strait of Hormuz.
The president and his Cabinet will meet at Camp David on Wednesday, a White House official told CNBC. But a deal has not been announced and tensions are escalating again.
The U.S. military said it “conducted self-defence strikes in southern Iran” early Tuesday, targeting vessels allegedly trying to deploy mines, as well as missile launch locations. The U.S. Central Command said the actions were intended “to protect our troops from threats posed by Iranian forces.”
Iran’s Islamic Revolutionary Guard Corps on Tuesday said it would retaliate against violations of the ceasefire after it identified and engaged U.S. drones and an F-35 jet fighter that entered the country’s airspace.
The Islamic Republic’s semi-official Tasnim news agency separately described recent talks with the U.S. as “overall good,” citing an informed source, but said a memorandum of understanding with Washington would depend on the release of $24 billion in frozen Iranian funds.
Complicating peace talks further, Trump said in a social media post Monday that he had encouraged Saudi Arabia, Qatar, Pakistan, Turkey, Egypt and Jordan to join the Abraham Accords, aimed at normalizing Arab nations’ diplomatic ties with Israel.
Trump also said negotiations with Iran were “proceeding nicely,” but cautioned that the U.S. could resume military action if discussions were to collapse. “It will only be a Great Deal for all or, no Deal at all,” Trump wrote.
Swiss multinational investment bank UBS said Friday that the global oil market was showing mounting signs of strain as inventories continue to fall amid ongoing disruptions to shipments through the Strait of Hormuz.
Observed global oil inventories dropped by a combined 246 million barrels in March and April, while cumulative production losses could exceed 1 billion barrels by the end of May, the bank said.
The sharp inventory drawdowns suggest the market remains “strongly undersupplied,” UBS said, pointing to falling on-land crude and refined product inventories even as oil stored on tankers rose due to rerouted U.S. exports to Asia
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