The Nigerian naira demonstrated notable resilience in the regulated market this Tuesday, appreciating by 0.99% to close at ₦1,344.42 per dollar.
This strengthening of the local currency within the Nigerian Foreign Exchange Market (NFEM) signals a shift in market sentiment, as the pace of foreign payments slowed in comparison to available dollar liquidity.
Data from the Central Bank of Nigeria revealed that while the spot rate experienced intraday fluctuations between ₦1,340 and ₦1,355, the parallel market remained decoupled, holding steady at ₦1,383 per dollar.
Financial analysts maintain a bullish outlook for the naira’s trajectory, underpinned by a formidable foreign reserve cushion exceeding $50 billion.
This optimism is further bolstered by projected increases in foreign exchange inflows from the nation’s hydrocarbon exports.
The broader energy market supported this narrative as crude oil futures surged, with Brent crude climbing 2.1% to reach $103.89 per barrel and West Texas Intermediate (WTI) jumping 3.2% to settle at $96.91 per barrel.
These price hikes were largely catalyzed by escalating friction in the Middle East following reports of an Israeli airstrike that claimed the life of Iranian security chief Ali Larijani.
Market volatility was compounded by geopolitical gridlock, as President Trump’s appeal to allies for assistance in reopening the Strait of Hormuz was met with resistance.
With traders now betting on a prolonged closure of this vital maritime artery, fears of significant supply disruptions continue to drive energy costs higher, providing a complex backdrop for Nigeria’s strengthening currency position.