Naira Weakens Further at Official Market Despite Midweek Recovery Attempts

The naira recorded a fresh round of depreciation at the official foreign exchange market last week, closing at ₦1,536.89 to the US dollar on Friday, a 1.25% drop week-on-week. Data from the Central Bank of Nigeria (CBN) showed the currency opened the week at ₦1,528.03/$, down from ₦1,517.93/$ in the previous session. Despite some midweek gains, the naira resumed its downward slide by week’s end.

The decline followed reports that negotiations between the Nigerian National Petroleum Company Limited (NNPC) and local refineries over a naira-for-crude oil supply deal had stalled. Talks are expected to resume this week, with discussions possibly extending the contract timeline. In the meantime, Dangote Petroleum Refinery has suspended its naira-based petroleum product sales, citing a mismatch in currency needs. Market analysts say this move could add pressure to the FX market, as traders would now require more dollars to buy refined products.

Efforts by the CBN to bolster FX supply to banks and Bureaux De Change have so far offered limited relief. Analysts warn that without deeper structural reforms, these interventions might only deliver short-term stability. Experts at Cowry Assets Management Limited noted the naira’s outlook remains mixed, citing increasing dollar demand from speculators and FX users. They added that continued CBN intervention is expected to help cushion volatility.

On the parallel market, however, the naira saw a slight recovery, gaining ₦12 to settle at ₦1,568/$—a 0.77% appreciation over the week. Afrinvest analysts confirmed the currency closed at ₦1,565/$ in the same market and forecast relative stability supported by CBN’s ongoing interventions.

Meanwhile, Nigeria’s foreign reserves slipped by 0.06% to $38.35 billion as of Thursday, down from $38.37 billion. Cowry Assets attributed the dip to the apex bank’s efforts to support the naira amid sluggish foreign exchange inflows.

Analysts over the weekend pointed to continued low foreign portfolio investor participation, largely due to weak oil revenue and geopolitical uncertainties. As an oil-dependent economy, Nigeria remains susceptible to global market shocks. Last week, Brent crude prices rose 3% to $85 per barrel, driven by renewed US sanctions on Iran and a reaffirmed production cut commitment by OPEC+ through June 2026.

With oil revenue central to Nigeria’s FX earnings, these global developments are likely to influence the naira’s performance in the coming weeks.