The naira reversed recent gains at the Nigerian Foreign Exchange Market (NFEM) on Thursday, slipping as demand for U.S. dollar transactions increased at the official exchange window.
After appreciating for three consecutive sessions, the local currency depreciated by 0.57 per cent, losing ₦7.77 against the dollar. The move reflected rising demand for foreign currency payments, particularly from corporates and portfolio investors.
Market participants attributed the depreciation to profit-taking by some foreign portfolio investors amid tight dollar supply. According to AIICO Capital Limited, increased demand pressures outweighed available liquidity during the session.
Trading data showed that the naira fluctuated within a band of ₦1,361.80/$ to ₦1,370.00/$ before settling at ₦1,366.06/$ by the close of trading.
Despite the currency weakness, Nigeria’s external position showed modest improvement. Data from the Central Bank of Nigeria indicated that gross external reserves rose by $106.24 million day-on-day to $46.81 billion, continuing a gradual accretion trend.
The increase in reserves occurred against the backdrop of declining global oil prices. Crude oil prices fell by more than 3 per cent on Thursday after reports that the United States and Iran agreed to hold talks in Oman, easing fears of supply disruptions from Iranian crude exports.
Brent crude declined by 2.42 per cent, shedding $1.68 to trade around $67.78 per barrel, while U.S. West Texas Intermediate fell by 2.39 per cent to approximately $63.58 per barrel.
Precious metals also came under pressure, with gold prices retreating as a stronger U.S. dollar dampened demand for the safe-haven asset. Spot gold declined by 1.85 per cent to $4,871.63 per ounce, while U.S. gold futures slipped by 1.21 per cent to about $4,890.95 per ounce.
Analysts note that oil prices may remain subdued as markets monitor developments from U.S.–Iran negotiations, while gold prices could continue to face headwinds from a firmer dollar and reduced geopolitical risk premiums.
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