Naira Declines Against U.S Dollar as FX Demand Spikes
The Nigerian local currency, the naira, diverged across the foreign currency markets amidst rising demand for the US dollar by eligible corporate FX users seeking foreign payments.
FX data released by investment banking firms revealed that the local currency gained N3 per dollar at the parallel window to close at N1,547 on Tuesday, while also declining by 6 bps at the Nigeria Foreign Exchange Market (NFEM) window to print at N1,537.75/$ from N1536.42 per dollar.
The interbank NFEM saw increased FX demand against limited supply, AIICO Capital Limited said, noting that the naira was trading between ₦1,537/$ and ₦1,539/$ at the official window. The latest update from the official window showed total foreign exchange inflows slipped, causing the Central Bank of Nigeria (CBN) to conduct FX intervention, selling $50 million to banks last week.
MarketForces Africa reported that Nigeria’s gross reserves reached $41.19 billion as of 25 August 2025, rising $85.58 million from the prior day. With the growing foreign reserves, analysts said the naira should remain stable amid growing external reserves.
Oil prices slid 2% on Tuesday, wiping out the previous day’s gains, as traders monitored U.S. tariff developments, the Ukraine conflict, and risks to Russian fuel supplies. Brent crude fell $1.58, or 2.3%, to $67.22 per barrel after briefly touching its highest level since early August. U.S. West Texas Intermediate dropped $1.55, or 2.4%, to $63.25.
Meanwhile, gold climbed to a more than two-week high, buoyed by safe-haven demand after President Trump dismissed a Federal Reserve governor, raising doubts about central bank stability.
Spot gold rose 0.5% to $3,382.19, while December U.S. gold futures also gained 0.5% to $3,433. Outlook: Investors are likely to stay hesitant in taking strong directional positions in the oil market due to prolonged uncertainty from the Ukraine conflict and ongoing tariff tensions.#Naira Declines Against U.S Dollar as FX Demand Spikes Nigerian Bonds Face Sell Pressures, Yield Climbs by 12bps
