Daily FX Update: Naira Drops to N1,457/$ at Official Window
The naira weakened against the dollar on Monday, declining 0.16% to ₦1,457.51 at the Nigerian foreign exchange market. The local currency weight versus the dollar reduced across the foreign exchange market, indicating a spike in US dollar demand.
The negative exchange rate direction was influenced by a lower volume of US dollars available at the supply side. Last week, Nigeria’s forex market stayed strong this week, as the naira continued to gain across both the official and parallel markets.
The local currency’s improvement was helped by better foreign exchange inflows, which reduced pressure on demand. On Friday, the naira closed at N1,455.17/$, showing renewed market confidence.
The latest update from the Central Bank of Nigeria (CBN) showed that foreign external reserves increased to $42.589 billion, helped by continued interventions and higher inflows from oil sales, remittances, and portfolio investments.
This steady rise gives the CBN more room to manage short-term pressures and supports expectations of naira stability in the near term. Meanwhile, the commodities market weakened as crude oil prices fell after the Israel–Hamas ceasefire, which reduced geopolitical risks and removed the war-related price premium.
Brent crude closed at $64.90/bbl, and WTI at $61.28/bbl, as concerns grew about a possible oversupply with OPEC easing production cuts.
In line with global trends, Nigeria’s Bonny Light dropped by 4.66% to $69.94/bbl, raising concerns about potential revenue and fiscal pressure if prices stay low.
Analysts expect the naira to stay stable in the near term, supported by steady FX inflows and CBN interventions. However, rising import demand or weaker dollar inflows could slow further gains.
Oil prices may remain under pressure due to higher supply, but any rebound in global demand could offer some support to Nigeria’s external earnings conditions, underpinning optimism for FX market stability, volatility in global oil markets may keep investor sentiment cautious.
