Nigeria’s currency weakened marginally against the United States dollar at the official foreign exchange window, closing at ₦1,338.10/$ after shedding ₦2.15 from the previous session’s ₦1,335.95/$ rate.
Data released by the Central Bank of Nigeria (CBN) showed that the spot exchange rate fluctuated within an intraday range of ₦1,328.00/$ to ₦1,340.00/$, reflecting moderate volatility driven by sustained demand pressures.
Market participants anticipate that the Naira will continue to trade within prevailing demand and supply conditions, supported by improving external reserves and enhanced liquidity management.
At the parallel market, the exchange rate advanced by 0.73 percent to ₦1,393/$, highlighting persistent disparities between the regulated official market and informal currency channels.
Recent currency trends have been shaped partly by global dollar dynamics. Offshore investors have reportedly reduced holdings in U.S. Treasury securities, contributing to broader dollar weakness in recent months.
Matthew Ryan, CFA and Head of Market Strategy at Ebury, noted that the depreciation of the U.S. dollar since “Liberation Day” has alleviated pressure on African currencies and contributed to a rebound across the region over the past ten months.
The relatively stable foreign exchange environment has bolstered sentiment within Nigeria’s capital markets. With inflation moderating toward the 15 percent threshold, real returns have improved, prompting selective foreign portfolio inflows into short-term fixed-income instruments.
Analysts at PAC Capital Limited observed that the Naira’s movement from ₦1,431/$ at the beginning of January to the current ₦1,338/$ level suggests that the currency is operating within a more predictable band, supported by reserve accumulation, improved liquidity, and a more transparent FX regime introduced in 2024.
While the premium between official and parallel markets persists as a structural feature, analysts argue that its narrowing reflects incremental progress following recent monetary reforms.
Meanwhile, oil prices experienced volatility on February 18 amid shifting expectations surrounding potential U.S.-Iran negotiations. Brent crude retains a year-to-date gain of 11.34 percent, averaging approximately $66 per barrel. Nigeria’s Bonny Light crude declined by 1.71 percent to $71.16 per barrel, mirroring cautious global sentiment.
Energy market movements remain critical for Nigeria’s external balance, given the country’s reliance on oil exports for foreign exchange inflows.
