Nigerian Naira Softens Against US Dollar, Euro, British Pound
The Nigerian local currency unit, the naira, weakened against major currencies in the foreign exchange market despite a growing external reserves position and a bout of hard-currency inflows.
Market liquidity was eclipsed by the strengthening of international payments demand by corporates seeking to settle external trade obligations. The next exchange rate concern is US dollar demand expectations ahead of the 2027 election.
Last week, the naira posted a loss against the U.S. dollar in both the official and parallel foreign exchange markets. In the official market, the naira depreciated by 0.08% week-on-week (WoW), closing at N1,331.19/$.
The local unit slipped slightly against the pound at ₦1,759.16/£ and lost 0.04% against the euro at ₦1,490.80/€. Similarly, the currency weakened by 1.81% WoW in the parallel market, settling at N1,361/$, reflecting renewed pressure on the domestic currency across both market segments.
The latest data from Apex Bank showed that Nigeria’s gross external reserves topped $55.05 billion, indicating a modest improvement in the country’s external liquidity position.
In a speech, Yemi Cardoso, the Central Bank of Nigeria (CBN) governor, told the public that Nigeria’s net external reserves rose to $46 billion.
The disclosure bolstered an expectation of a stronger naira estimated to close the year at N1300, and some naira bulls are also projecting a range between N1,200 and N1,300.
However, pre-election demand is cited as a key downside to naira momentum. Most economists and market analysts anticipated that unusually high demand in pre-election spending could dampen demand for the naira and weaken the exchange rate.
In the global oil market, crude oil prices were poised for a weekly gain amid heightened geopolitical tensions following reports of tanker attacks in and around the Strait of Hormuz.
Although reports of productive talks between the United States and Iran initially offered some reassurance, they failed to ease market concerns over potential supply disruptions.
In the global commodity market, international benchmark Brent crude traded at $103.10 per barrel, while West Texas Intermediate (WTI) stood at $90.84 per barrel.
Although both benchmarks edged lower from their opening levels, they remained above their respective opening prices for the week.
Similarly, Nigeria’s Bonny Light crude advanced by 0.17%, reflecting the broadly supportive impact of geopolitical developments on oil prices. Lagos Set to Open N200 Billion State Bond for Subscriptions
