Naira Falls to N1437 as US Dollar Demand Eclipses FX Supply
The naira fell to N1437 at the Nigerian foreign exchange market as US dollar demand for international payments eclipsed the supply levels.
The Central Bank daily FX update revealed that the spot rate depreciated slightly by 0.05% to ₦1,437.29/$ in the official market even after $50 million in FX sales to authorized dealer banks last week.
The official spot FX rate touched an intraday high of N1442 at the CBN window, suggesting that the market was heated up by higher demand for foreign currency.
This happened at the time record showed that FX inflows into the Nigerian forex market fell by about 14% last week to approximately $900 million from N1.04 billion in the previous period.
In the forex market, the best transaction on record was consummated at N1435 per dollar – with the exchange rate eventually closing the day at N1437.5000.
In the parallel market, the naira strengthened by 0.69% to ₦1,440/$, highlighting persistent divergence between formal and informal foreign exchange channels. The update showed that external reserves surged to $43.348 billion amidst uncertainties in the global commodities market.
Brent crude extended its losing streak last week, shedding 1.84% week on week to close at US$63.59 per barrel (bbl), augmenting its year-to-date (YTD) losses to 13.60% compared with 13.45% in the prior week.
Similarly, Bonny Light fell 1.57% to US$65.69/bbl, widening its year-to-date losses to 12.97% from 11.58% the previous week. Consequently, Bonny Light’s premium to Brent expanded to US$2.10/bbl from US$1.67/bbl, reflecting continued pricing divergence.
The week’s losses were primarily driven by renewed oversupply concerns, after U.S. crude inventories rose 5.2 million barrels, far exceeding expectations, according to the Energy Information Administration (EIA). The build was attributed to higher imports and reduced refinery activity.
Meanwhile, ongoing Western sanctions on Russia and Iran have led to record volumes of oil being stored at sea, disrupting trade patterns but mitigating the immediate risk of a global supply glut.
Notably, the U.S. embargo on Rosneft and Lukoil continues to tighten traditional supply channels, adding volatility to the current market sentiment.
Crude prices briefly rebounded from a midday dip on Friday amid mild optimism that Hungary would be permitted to maintain access to Russian crude, following a meeting between U.S. President Donald Trump and Hungarian Prime Minister Viktor Orban at the White House.
In the near term, crude prices are expected to face sustained downward pressure as elevated U.S. inventories signal weakening refinery demand amid market oversupply.
However, the tightening impact of sanctions on Russia’s Rosneft and Lukoil, alongside continued logistical disruptions from Iran’s export constraints, should temper a deeper correction.
Market sentiment will likely hinge on the pace of destocking and clarity around Europe’s stance on Russian crude exemptions, particularly following Hungary’s negotiations.
Excess Crude Account
Nigeria’s Excess Crude Account (ECA) and Stabilisation Account have both recorded notable increases between June 2023 and October 2025, reflecting renewed fiscal discipline and stronger revenue mobilisation at the federal level.
Data presented by the accountant general of the federation to the National Economic Council (NEC) show that the ECA grew by 13% over the two year period, while the Stabilisation Account more than tripled in value.
Analysts said between 15 June 2023 and 23 October 2025, the Excess Crude Account balance rose from US$473,754.57 at the administration’s first NEC meeting to US$535,823.39 by October 2025.
Over the same period, the Stabilization Account increased sharply from ₦26.63 billion to ₦87.67 billion, representing a gain of ₦61.03 billion or approximately 229%. Similarly, the Development of Natural Resources Fund grew from ₦96.90 billion to ₦141.59 billion, marking a 46% increase. Cadbury Nigeria Shares Hit Oversold, Analysts Now See Upside
