The Nigerian naira appreciated slightly against the U.S. dollar, closing at N1,499.10 per dollar in the official foreign exchange market, according to data from the FMDQ. Market liquidity remained stable, with transactions ranging between N1,497.00 and N1,501.00 per dollar on Monday. The parallel market rate held steady at N1,505, as supply pressures eased.
Despite a stable performance last week, the naira has faced challenges due to declining foreign reserves. In February, the naira depreciated by 1.69% in the official market but gained 7.33% in the parallel market. As of 2025, its year-to-date gain stands at 2.48% in the official market and 9.67% in the parallel market.
A major factor impacting exchange rate stability has been the depletion of Nigeria’s foreign reserves, which have dropped by $2.461 billion since the beginning of the year. The latest data from the Central Bank of Nigeria (CBN) shows that foreign reserves fell further to $38.416 billion by the end of February. The decline has been attributed to the CBN’s continuous intervention in the FX market to support liquidity.
A macroeconomic update from Verto FX has urged policymakers to limit excessive dollar supply in a bid to bridge the gap between the official and parallel markets. Analysts warn that Nigeria’s foreign reserves are depleting amid ongoing global market uncertainties.
Meanwhile, oil prices, a key driver of Nigeria’s forex earnings, remained relatively stable. Brent crude traded at $72.71 per barrel, while WTI settled at $69.56. However, concerns over new U.S. tariffs and the ongoing Russia-Ukraine conflict continue to influence the market.
On the commodities side, gold prices rebounded by over 1% after hitting a three-week low. A weaker dollar and increased safe-haven demand pushed spot gold to $2,891.29 per ounce, while U.S. gold futures climbed 1.9% to $2,902.30 per ounce.
Investors remain cautious, keeping an eye on upcoming economic policies and global market trends to gauge future movements in currency and commodity markets.
