The Nigerian naira posted a notable gain on Wednesday, appreciating to ₦1,584 per US dollar at the official Nigerian Foreign Exchange Market (NFEM), buoyed by rising external reserves and a deceleration in corporate dollar demand.
However, the currency experienced a slight setback in the parallel market, slipping by 0.31% to settle at ₦1,625 per dollar. On the FMDQ platform, the naira appreciated by 0.33%, closing at ₦1,582.82.
The upward movement in the exchange rate was underpinned by increased dollar availability and reduced volatility, providing traders with confidence. Intraday trading saw the USD/NGN pair fluctuate between ₦1,582.50 and ₦1,590.00, with the final average rate closing at ₦1,584.4966—a 37 basis points improvement.
Market analysts at AIICO Capital Limited noted, “We anticipate minimal fluctuation in the naira’s value in the short term as current exchange levels appear to have stabilised.”
Contributing to the positive sentiment was the continued increase in Nigeria’s foreign reserves, which climbed to $38.526 billion, according to Central Bank of Nigeria (CBN) data. This rise occurred despite ongoing volatility in global crude oil prices.
Oil prices slipped midweek as U.S. data revealed an uptick in fuel and crude inventories, which tempered enthusiasm ahead of the summer driving season. Brent crude edged lower by 12 cents to $65.26 per barrel, while U.S. West Texas Intermediate fell by 9 cents to $61.94 per barrel.
Earlier in the day, fears of a geopolitical escalation involving Israel and Iran had pushed prices up briefly by nearly 1%, raising concerns over supply disruptions.
In contrast, gold prices surged for the third consecutive day, hitting a one-week peak. Spot gold climbed 0.7% to $3,312.51 per ounce, supported by a weakening dollar and ongoing geopolitical tensions. Analysts cautioned that a worsening of these tensions could spark temporary oil trade disruptions or slash supply by 500,000 barrels per day—though OPEC+ is seen as capable of rapidly responding with spare capacity.
