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The naira weakened against the US dollar at Nigeria’s official foreign exchange window on Friday. This happened despite a modest increase in the country’s external reserves.
Data from the Central Bank of Nigeria (CBN) showed that the naira depreciated by 0.21% to close at N1,421.63 per dollar at the official market. By the end of trading, the currency had lost 0.72% overall.
Parallel Market Sees Wider Gap
At the parallel market, the naira fell further to around N1,475 per dollar. This decline reflects continued pressure from strong dollar demand and ongoing structural challenges in the foreign exchange market.
Although reserves improved, market liquidity remained tight. FX payment obligations continued to strain supply at the official window.
Analysts Warn of Continued Pressure
Analysts say bearish sentiment around the naira has intensified. Global geo-economic uncertainty is adding to the pressure.
In particular, concerns over the United States’ increasingly protectionist trade policies have unsettled emerging markets. Some projections also warn that possible capital gains tax changes could trigger sell-offs in naira-denominated assets.
As a result, demand for foreign currency remains elevated.
Cowry Asset Management Limited said the naira may stay under pressure in the near term. However, it noted that rising external reserves could offer limited support.
External Reserves Edge Higher
Nigeria’s external reserves rose by 0.20% to $45.99 billion. The increase was supported by steady crude oil earnings, stronger non-oil inflows, and a sustained trade surplus.
Even so, analysts caution that reserves alone may not be enough to stabilise the currency without improved FX supply and confidence.
Oil Prices Climb on Geopolitical Tensions
Meanwhile, global oil prices closed at their highest levels in over a week. Rising geopolitical tensions pushed prices higher.
The increase followed fresh sanctions announced by US President Donald Trump on vessels transporting Iranian oil. He also revealed that a US naval armada was heading toward Iran, raising fears of supply disruptions.
Brent crude settled at $64.50 per barrel, while US West Texas Intermediate (WTI) rose to $59.78 per barrel. The gains reversed earlier losses linked to easing US–Europe trade tensions.
