The Nigerian naira depreciated against the United States dollar on Wednesday, settling at N1,599 in the official Nigerian Foreign Exchange Market (NFEM), according to data sourced from the Central Bank of Nigeria (CBN) portal.
Despite this decline, liquidity within the foreign exchange market maintained its positive momentum, bolstered by an uptick in dollar inflows from domestic corporations and interventions by the apex bank. Trading of the USD/NGN pair fluctuated within a band of N1,575.00 to N1,620, based on the CBN’s disclosed figures. By the close of trading, the naira had dropped by 5 basis points, ending the day at N1,599.7991.
In contrast, the parallel market exchange rate held steady at N1,620 per dollar, as a slowdown in dollar purchases from Bureau de Change (BDC) operators continued. The CBN, however, has indicated that access to dollar liquidity will remain open through May 2025.
The domestic currency also recorded a loss of N6.7162 against the British pound, closing at N2,121.9735, according to CBN data. Furthermore, Nigeria’s gross external reserves have recorded no inflows so far this week. The country’s foreign reserves dipped below the $38 billion mark, with only $23 billion classified as unencumbered by the central bank.
Currently, Nigeria’s foreign reserves stand at $37.907 billion, down from a recent peak of $43 billion in 2025. This decline has been attributed to continuous foreign debt servicing obligations and persistent FX market interventions, compounded by fluctuating global oil prices.
Meanwhile, in the international commodities market, oil prices surged over $1 per barrel on Wednesday amid renewed fears of supply disruptions following new U.S. sanctions targeting Chinese entities for importing Iranian crude.
Brent crude appreciated by $1.04 or 1.61% to reach $65.71 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 97 cents or 1.58%, rising to $62.30. Concurrently, gold extended its record-breaking rally, surging past the $3,300 per ounce mark as investors flocked to safe-haven assets amid growing geopolitical tensions between the U.S. and China and a weakening dollar.
Spot gold climbed by 3.1% to $3,327.97 an ounce as of 1:45 p.m. ET, after touching an intraday high of $3,332.89, its highest level on record. The increased demand for gold underscores heightened uncertainty across both political and economic landscapes globally.
Elsewhere, Fitch Ratings revised its 2025 oil price projections for Brent and WTI downward, citing slower-than-anticipated economic growth and expanded OPEC+ production plans for May.
While its mid-cycle and medium-term forecasts for oil and gas prices remain unchanged, Fitch noted that its short-term assumptions were revised due to a sharp deceleration in global GDP growth—projected at 1.9% in 2025, down from 2.9% in 2024. This downturn is expected to constrain global oil demand.
“Our forecast places global oil demand growth at under 1 million barrels per day (MMbpd) for 2025, driven by sluggish growth in China and continued weakness in the petrochemical sector,” the agency stated.
OPEC+ currently holds approximately 5.6 MMbpd of spare production capacity and plays a critical role in market balancing. The alliance had initially planned to gradually phase out 2.2 MMbpd in voluntary cuts from April 2025 through September 2026, starting with a production increase of 138,000 barrels per day (kbpd) in April, and another 135 kbpd in May.
On April 3, OPEC+ revised its output target increase for May to 411 kbpd but clarified that actual increases would be dependent on prevailing market conditions, with potential downward adjustments due to overproduction by some member states.
Fitch concluded, “We maintain our expectation that the global oil market will be oversupplied in 2025. Global supply could rise by over 1.6 MMbpd if the group proceeds with its plan to unwind voluntary cuts. This projection may be influenced by how countries producing above quotas respond to the tripling of the production target increase for May.”
