By Boluwatife Oshadiya
Key Points
- Naira appreciated by ₦1.49 at the official market
- Improved FX liquidity and stronger inflows supported the local currency
- External reserves declined slightly to $48.32 billion
- Global oil prices gained amid renewed Middle East tensions
- Analysts expect cautious FX market trading in the short term
Main Story
The Nigerian naira strengthened further against the United States dollar on Thursday as improved foreign exchange liquidity boosted market confidence across the official FX market.
Data released by the Central Bank of Nigeria showed that the naira appreciated by ₦1.49 to close at ₦1,355.85/$ at the official market window.
During trading, the local currency traded within a band of ₦1,360.50/$ and ₦1,354.00/$ before settling at ₦1,355.85/$.
Market analysts linked the naira’s appreciation to sustained foreign portfolio inflows, stronger FX liquidity, and continued confidence in ongoing foreign exchange reforms introduced by the apex bank.
The latest appreciation extends the local currency’s recent recovery trend after months of heightened volatility in the foreign exchange market.
However, Nigeria’s external reserves recorded a marginal decline of $7.73 million to $48.32 billion as of May 6, 2026, compared to $48.33 billion recorded previously.
Meanwhile, global crude oil prices traded higher on Thursday amid renewed geopolitical tensions surrounding Iran and the Strait of Hormuz.
Brent crude rose by 35 basis points to trade at $101.62 per barrel, while U.S. West Texas Intermediate crude gained 0.87 percent to settle around $95.91 per barrel.
The gains followed reports suggesting Iran may resist efforts by the United States to reopen the Strait of Hormuz under proposed diplomatic arrangements.
Gold prices also advanced amid investor optimism surrounding a potential U.S.-Iran peace deal, which eased fears of prolonged inflationary pressures and aggressive interest rate hikes.
Spot gold rose by 23 basis points to trade at approximately $4,710.03 per ounce, while U.S. gold futures climbed 0.48 percent to around $4,716.84 per ounce.
What’s Being Said
Currency analysts said improved FX liquidity and sustained policy reforms by the Central Bank are gradually restoring confidence in Nigeria’s foreign exchange market.
Economic experts also noted that stronger oil prices could provide additional support for Nigeria’s FX earnings if production levels improve steadily.
What’s Next
Analysts expect cautious trading in the FX market in the near term as investors continue to monitor global oil prices, external reserve levels, and geopolitical developments in the Middle East.
Oil prices are also projected to remain volatile amid uncertainty surrounding diplomatic negotiations involving Iran and major global powers.
