By Boluwatife Oshadiya, Markets Correspondent | May 18, 2026, 10:45 AM
Key Points
- Naira depreciates to ₦1,371.04 at the official market despite CBN interventions
- Parallel market rate weakens to ₦1,380/$ as FX demand pressures persist
- Nigeria’s external reserves rise 0.19% to $48.54 billion on fresh inflows
Main Story
The Nigerian naira opened the week on a weaker note after losing ₦10 against the United States dollar amid sustained foreign exchange demand pressures and limited market liquidity.
Data published by the Central Bank of Nigeria showed the local currency depreciated by 0.70% at the official market to close at ₦1,371.04/$ on Friday, while opening Monday at ₦1,381.39 amid continued volatility in interbank trading activity.
Pressure also persisted in the parallel market, where the naira weakened to ₦1,380 per dollar as demand for foreign currency outpaced available supply in the informal segment.
The depreciation comes despite continued interventions by the apex bank aimed at stabilising the market and improving dollar liquidity for importers and manufacturers.
However, Nigeria’s foreign exchange reserves recorded a modest improvement, rising by 0.19% to $48.54 billion. Analysts attributed the increase to fresh inflows into the country’s external reserve position after weeks of relatively stagnant movement.
The rebound in oil prices also provided mild support for Nigeria’s external outlook. Brent crude rose by 3.24% to $109.20 per barrel, while US West Texas Intermediate climbed 3.73% to $104.90. Nigeria’s Bonny Light crude gained 5.99% to trade at $116.99 per barrel.
The rally followed heightened geopolitical tensions in the Middle East after US President Donald Trump issued fresh warnings to Iran, reigniting concerns over potential supply disruptions through the Strait of Hormuz — a major global oil shipping route.
What’s Being Said
“The naira is expected to remain under pressure in the near term due to sustained FX demand and limited market liquidity despite the modest rise in external reserves,” said analysts at Cowry Asset Management Limited.
“Higher crude oil prices may provide temporary support through improved export earnings, but oil market volatility driven by geopolitical tensions continues to pose risks to Nigeria’s external position,” the firm added.
Independent market analysts also warned that without stronger autonomous FX inflows or broader policy support, the local currency could continue trading within a weak and volatile range.
What’s Next
- Investors are expected to monitor the next round of FX interventions by the CBN for signs of improved liquidity
- Oil market volatility linked to Middle East tensions may continue influencing Nigeria’s external reserves and FX outlook
- Analysts expect demand for foreign currency from importers and manufacturers to remain elevated in the short term
Bottom Line
The Bottom Line: Nigeria’s improving external reserves and rising oil prices are offering temporary support for the naira, but underlying FX liquidity pressures remain unresolved. Without stronger foreign capital inflows and sustained policy stability, the local currency is likely to remain volatile despite the CBN’s interventions.
