The naira weakened against the US dollar at the Nigerian Foreign Exchange Market on Tuesday, pressured by increased demand for foreign payments. With reduced interventions from the Central Bank of Nigeria, the local currency has faced heightened volatility against the greenback, although Broadstreet analysts remain optimistic about exchange rate stability in the months ahead.
The apex bank supported the naira with $150m in April, marking an 83 per cent drop from the amount injected into the official window in March. The move signals a more cautious approach aimed at preserving Nigeria’s gross external reserves, which have fallen by about $1bn to $48.34bn.
At the official window on Tuesday, the naira closed at N1,366.56/$, slightly weaker than N1,365.25/$ recorded the previous day, based on daily FX data from the apex bank.
Additional data showed a significant uptick in interbank foreign exchange activity, helping to improve liquidity in the official window despite reduced direct intervention. Interbank FX turnover rose to $71.59m across 99 deals, up from $59.93m in the prior session.
Meanwhile, global oil prices declined on Tuesday following a United States operation to reopen the Strait of Hormuz to shipping. However, intermittent clashes between U.S. and Iranian forces limited the extent of the drop.
Brent crude futures fell by $1.38, or 1.2 per cent, to $113.06 per barrel after a nearly six per cent jump on Monday. U.S. West Texas Intermediate crude also dropped by $2.21, or 2.1 per cent, to settle at $104.26 per barrel.
Governor Olayemi Cardoso noted that Nigeria’s foreign exchange system has evolved into a more market-driven structure. He emphasized that increased liquidity and investor confidence now allow participants to enter and exit the market with greater flexibility.
