By Boluwatife Oshadiya | May 25, 2026
Key Points
- Naira depreciated to ₦1,375.46 per dollar at the official market
- Bonny Light crude declined by 5.99 percent despite gains in Brent and WTI prices
- Nigeria’s external reserves rose marginally to $48.72 billion
Main Story
The naira weakened slightly against the United States dollar last week as declining prices for Nigeria’s Bonny Light crude reduced momentum in foreign exchange inflows from oil exports.
At the official foreign exchange market, the naira depreciated by 0.32 percent week-on-week to close at ₦1,375.46 per dollar. The parallel market also weakened marginally to ₦1,370.12 per dollar, reflecting persistent demand pressure across the FX market.
Nigeria’s gross external reserves rose marginally by 0.05 percent to $48.72 billion, supported by oil receipts and continued foreign portfolio inflows despite pressure from intervention activities and external debt obligations.
Global oil benchmarks traded higher amid renewed optimism surrounding possible progress in United States-Iran negotiations. Brent crude rose by 1.56 percent to $104 per barrel, while West Texas Intermediate climbed 1.25 percent to $98.75 per barrel during early Asian trading sessions.
However, Nigeria’s Bonny Light crude moved against the broader trend, declining by 5.99 percent to settle at $116.92 per barrel due to changing demand dynamics and pricing differentials in the international oil market.
FX analysts noted that although the exchange rate has remained below the ₦1,400 per dollar threshold at the official window, the market remains fragile amid sustained dollar demand from importers and businesses.
The spread between the official and parallel market rates narrowed significantly in recent months, declining from an average of ₦67.48 per dollar in January to ₦26.38 per dollar, suggesting improved pricing alignment across FX segments.
“Rising external reserves may continue to cushion volatility, although the naira is still likely to face mild pressure from persistent demand for dollars,” analysts said in market notes reviewed by BizWatch Nigeria.
The Issues
Nigeria’s FX market remains heavily tied to crude oil earnings, making the naira vulnerable to fluctuations in global energy prices and export performance. While reforms introduced by the Central Bank of Nigeria have improved FX liquidity and market transparency, sustained pressure on oil production and external obligations continue to weigh on reserves.
The decline in Bonny Light prices also underscores Nigeria’s exposure to grade-specific crude demand conditions despite broader strength in global oil markets. Analysts warn that prolonged weakness in oil inflows could challenge the country’s reserve accumulation targets.
What’s Being Said
“The narrowing spread between official and parallel market rates points to improving confidence in the FX market framework,” said Bismarck Rewane, Chief Executive Officer of Financial Derivatives Company.
“External reserves have remained relatively stable despite ongoing intervention pressures,” analysts at Cowry Asset Management Limited stated.
What’s Next
- Investors will closely monitor oil price movements and external reserve performance in the coming weeks
- Analysts expect the Central Bank to maintain intervention efforts to stabilise the naira
- Global geopolitical developments, especially around Middle East tensions and US-Iran negotiations, could continue influencing oil prices and FX inflows
The Bottom Line:
The naira’s stability remains closely linked to oil market performance and foreign capital inflows. While reserve levels and tighter FX management have improved market confidence, Nigeria’s currency remains exposed to external shocks and persistent dollar demand.
