Nigeria’s local currency held firm against the US dollar on Tuesday, reflecting sustained market confidence and adequate foreign exchange liquidity within the Nigerian Foreign Exchange Market (NFEM).
At the close of trading, the naira recorded a marginal change, settling at N1529 per dollar in the official window, according to figures released by the Central Bank of Nigeria (CBN). This stability comes as Nigeria continues to benefit from steady dollar inflows from foreign portfolio investors, exporters, and the CBN’s consistent market interventions.
Official data shows a modest appreciation in the value of the naira, which moved from N1529.71 to N1529.57 per dollar. Market participants conducted transactions within a tight range—between N1521 at the low end and N1531.50 at the high—before closing at N1527, reflecting moderate market activity without extreme volatility.
According to a CBN statement, the official exchange rate represents a volume-weighted average rate, making it the market’s reference point for the day’s foreign exchange dealings.
Meanwhile, in the unofficial or parallel market, the exchange rate remained static at N1565 per dollar, resulting in a relatively narrow spread of N31 between the two segments. The CBN continues to pursue a foreign exchange convergence strategy, aimed at reducing arbitrage and enhancing naira stability.
Commodity Markets Respond to Global Shifts
Elsewhere, in the global commodities market, oil prices saw modest gains as traders weighed positive demand signals amid caution ahead of the anticipated OPEC+ meeting, which is expected to determine production levels for August.
Brent crude rose by $0.37 (0.6%) to close at $67.11 per barrel, while West Texas Intermediate (WTI) advanced by $0.34 (0.5%) to reach $65.45 per barrel.
Simultaneously, the gold market surged, with prices climbing more than 1%, as investors sought safer assets amid global uncertainty. The movement followed the U.S. Senate’s approval of President Trump’s legislative package, dubbed the “big, beautiful bill,” ahead of looming tariff decisions expected by July 9.
Spot gold rose to $3,338.24 per ounce, a 1.1% gain, while U.S. gold futures ended the session up by 1.3%, closing at $3,349.80 per ounce.
Volatility in Q2 Driven by Geopolitical Tensions
A report from investment advisory firm Parthian Partners has shed light on the intense volatility seen across commodity markets during the second quarter of 2025, largely driven by heightened geopolitical risk.
In particular, a 12-day conflict in the Middle East—sparked by a series of targeted attacks on Iran’s nuclear infrastructure in mid-June—caused a temporary spike in oil prices. Brent crude soared above $80 per barrel at the height of the conflict, offering oil-exporting nations in Sub-Saharan Africa a temporary fiscal boost.
However, oil-importing countries faced mounting pressure due to surging energy costs. Relief came when an international ceasefire was quickly brokered, calming markets and allowing oil prices to retrace back to the mid-$60s by the end of June.
The temporary risk premium on oil eased as OPEC+ signaled a gradual increase in production quotas, and U.S. shale output surged to record highs. Despite this stabilization, Parthian emphasized that the sharp fluctuations throughout the quarter demonstrated the vulnerability of commodity markets to geopolitical disruptions.
Outlook: CBN Eyes Long-Term FX Stability
As the naira remains steady, analysts point to Nigeria’s positive foreign investor sentiment, healthy reserves, and increased non-oil exports as encouraging signs. The CBN’s goal of narrowing the official-parallel market spread and fostering long-term exchange rate stability remains central to its broader economic strategy.
Market watchers will continue to monitor upcoming monetary policy signals, geopolitical developments, and global oil trends as key variables likely to shape Nigeria’s forex and fiscal outlook in the coming months.
