The Nigerian naira faced slight depreciation on Thursday, settling at ₦1,584.95 per US dollar at the official window, amid fluctuations driven by demand and inflows that boosted the country’s external reserves. The local currency oscillated between ₦1,582 and ₦1,588.50 during the session, showing signs of continued pressure despite increasing reserves.
According to the Central Bank of Nigeria (CBN), the nation’s gross external reserves climbed to $38.544 billion, supported by recent inflows amid ongoing concerns in the global financial and commodities markets.
In the parallel market, the naira held firm at ₦1,625, while it closed at ₦1,582.86 at the FMDQ Exchange platform. Market participants noted that the slight weakening at the official market reflects cautious sentiment following fluctuations in oil prices and dollar liquidity.
Crude oil futures dropped as investors reacted to news that OPEC+ might increase output in July. Brent crude fell by $0.66 to $64.25 per barrel, while West Texas Intermediate (WTI) dipped by $0.51 to $61.06 per barrel. These price pressures may reduce Nigeria’s foreign earnings, potentially influencing FX market stability.
Meanwhile, gold prices reversed gains after reaching a two-week high. Spot gold slipped 0.6% to $3,295.21 an ounce due to profit-taking and the strengthening U.S. dollar.
With forex market uncertainty persisting and inflationary trends remaining a concern, analysts anticipate continued volatility in exchange rates, particularly as global monetary tightening and commodity price shifts exert pressure on emerging market currencies like the naira.
