By BizWatch Nigeria
Key Points
- Naira depreciates to N1,366/$ amid increased FX demand
- Interbank FX turnover rises significantly to $71.59 million
- CBN intervention declines sharply in April
- External reserves fall to $48.34 billion
Main Story
The Nigerian naira weakened against the US dollar on Tuesday at the Nigerian Foreign Exchange Market (NFEM), settling at N1,366.56/$, as demand for foreign currency intensified across the economy.
Data from the Central Bank of Nigeria (CBN) showed the local currency depreciated slightly from N1,365.25/$ recorded in the previous session, reflecting ongoing pressure in the FX market amid reduced intervention by the monetary authority.
The CBN scaled back its market support in April, injecting approximately $150 million into the official window—an 83% decline compared to March levels. The reduced intervention comes as Nigeria’s gross external reserves continue to decline, falling by about $1 billion to $48.34 billion.
Despite the weaker currency, activity in the FX market strengthened. Interbank foreign exchange turnover surged to $71.59 million across 99 deals, up from $59.93 million recorded a day earlier, indicating improved liquidity conditions in the official window.
Analysts attribute the naira’s recent volatility to a combination of reduced FX supply from the apex bank and sustained demand for imports and foreign obligations.
On the global front, oil prices—Nigeria’s primary source of foreign exchange earnings—declined on Tuesday following renewed efforts by the United States to restore shipping operations through the Strait of Hormuz. However, ongoing tensions between the US and Iran limited the extent of the price drop.
Brent crude futures fell by $1.38 (1.2%) to $113.06 per barrel, while US West Texas Intermediate (WTI) crude declined by $2.21 (2.1%) to $104.26 per barrel, after recording significant gains in the previous session.
What’s Being Said
“While short-term pressures persist, the medium-term outlook for the naira remains cautiously optimistic, supported by expected FX inflows and ongoing policy adjustments,” market analysts at Broadstreet stated.
What’s Next
Market participants will be watching for further policy signals from the CBN, movements in external reserves, and global oil price trends, all of which will play a critical role in determining the direction of the naira in the coming weeks.
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