Nigeria’s currency weakened further on Wednesday, with the naira closing at N1,353 per dollar at the official foreign exchange window, according to data from the Central Bank of Nigeria. The latest depreciation underscores renewed pressure on the local currency amid rising demand for foreign exchange.
Trading during the session reflected notable volatility. The naira recorded an intraday high of N1,362 per dollar, compared with N1,355 in the previous session, while its strongest level stood at N1,349, down from N1,340 a day earlier. The movement highlights the currency’s continued sensitivity to market demand and external conditions despite ongoing policy interventions.
Market analysts attribute the decline largely to increased demand for foreign exchange from businesses and investors seeking to meet offshore obligations. The persistent gap between demand and supply continues to strain liquidity in the FX market, influencing exchange rate movements at the official window.
Nigeria’s external reserves also slipped slightly, falling by $178 million after a series of international payments by the central bank. Reserves now stand at $49.83 billion, down from $50.008 billion. While the drop is modest, it reflects ongoing outflows linked to external commitments, though the reserve level remains relatively strong by historical standards.
In the global commodities market, oil prices surged sharply, adding another layer of complexity to the outlook. Brent crude rose by more than five percent to about $109 per barrel, while U.S. West Texas Intermediate hovered below $98. The rally has been driven by geopolitical tensions and signals from the U.S. Federal Reserve, which held its benchmark interest rate steady at between 3.5 percent and 3.75 percent.
Escalating tensions in the Middle East have further unsettled global markets, particularly following reported damage to major energy infrastructure linked to one of the world’s largest liquefied natural gas export facilities. The disruption has heightened concerns over global energy supply, pushing prices higher and increasing volatility.
Although higher oil prices typically boost Nigeria’s foreign exchange earnings, analysts say the gains may be offset by sustained FX demand and external payment pressures. The naira’s near-term direction is expected to depend on the central bank’s ability to manage liquidity, as well as developments in global oil markets and geopolitical risks.
Recent data also shows that the naira has faced continued pressure in the foreign exchange market in recent weeks, reflecting broader economic and global uncertainties.
