The Nigerian naira struggled at the official window, shedding 1.25% week-on-week to settle at 1536.89/$ on Friday. According to data from the Central Bank of Nigeria, the local currency started the week on a weak note at 1,528.03/$, down from 1,517.93/$ in the previous trading session.
The naira’s depreciation occurred amid reports that negotiations on the naira-for-crude agreement between the Nigerian National Petroleum Corporation Limited and local refineries had stalled. Industry experts and oil marketers warned that the halt in naira sales by Dangote Petroleum Refinery could increase pressure on the foreign exchange market.
The Central Bank of Nigeria has continued to intervene in the foreign exchange market, boosting FX supply to banks and Bureaux De Change. However, analysts caution that these interventions may only provide temporary relief without structural reforms to address Nigeria’s prolonged FX challenges.
At the parallel market, the naira gained N12 against the dollar, appreciating by 0.77% week-on-week to close at an average of N1,568 per dollar. Researchers at Afrinvest reported that the naira closed at 1565/$ in the parallel market, projecting a stable naira “underpinned by continued CBN intervention.”
The Central Bank of Nigeria’s foreign reserves declined by 0.06% from $38.37bn to $38.35bn as of Thursday. Researchers at Cowry Assets Management attributed the decline to the CBN’s continued efforts to defend the local currency amid minimal foreign exchange inflows into the economy.
The benchmark Brent crude oil price advanced by 3.0% week-on-week to settle at approximately $85.00/bbl, driven by supply concerns following fresh US economic sanctions against Iran. OPEC+ reaffirmed its commitment to production cuts until June 2026 to stabilize global oil markets.
The naira’s depreciation at the official window highlights the ongoing challenges in Nigeria’s foreign exchange market. While the Central Bank of Nigeria’s interventions have provided temporary relief, structural reforms are necessary to address the country’s prolonged FX challenges.