Naira Appreciates, Nigeria’s FX Reserves Rise as Crude Price Hits $81 Per Barrel

• The Nigerian currency has continued to surge against the dollar as the US greenback is at its lowest since 2022
• Data from the Central Bank of Nigeria (CBN) shows that the naira and the country’s FX reserves climbed to new highs last week
• Also, CBN data showed that Nigeria’s crude oil blend, Bonny Light, cruised to a new high amid easing Middle East tensions

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The naira exchange rate rose against the US dollar in the Nigerian Foreign Exchange Market.

The development comes as data from the Central Bank of Nigeria (CBN) shows that Bonny Light crude prices hit $81 per barrel last week.

Naira vs dollar: What is driving the surge?

The naira has remained strong, ending last week strongly, as the US dollar continues to lose its steam against major currencies in the global FX markets.

According to reports, the dollar index remained steady at $97.2 on Friday, June 27, 2025, nearing its lowest level since February 2022, after a four-day drop in which it lost about 1.5%, caused by increasing expectations of Federal rate cuts.

CBN data shows that the naira appreciated against the US greenback by about N8 week-to-date, trading at N1,539.23 per dollar from N1,547.43 at the end of last week.

Official and black markets narrow gaps

In the parallel segment of the foreign exchange market, the naira closed at N1,565 per dollar, thereby narrowing the gap by about N26 from N33 in the previous week.

Market Forces Africa reported that Nigeria’s foreign reserves ended the week at $37.37 billion, rising by about 0.78% from the previous week’s $37.66 billion due to new inflows.

The report disclosed that crude oil prices recorded a weekly loss, caused by easing Middle East tensions, which have lowered fears of supply disruptions.

Crude oil price: The effect on the naira?

Brent crude dipped to about $68 per barrel, while WTI sold slightly above $65, both down from last week’s highs.

Nigeria’s Bonny Light remained resilient, selling close to $81 per barrel, CBN data says.

Meanwhile, the naira rallied across the official and black markets, appreciating N1,539 per dollar and N1,565, respectively, supported by improving market sentiment and FX inflows.

Information from the Nigerian Exchange Limited’s (NGX) Domestic and Foreign Portfolio Report showed that total transactions on the NGX rose by 45.3% to N700.50 billion in May from N483.04 billion in the previous month.

The performance was caused by higher participation from domestic and foreign investors.

Analysis shows that domestic investors’ inflows dipped by 38.38% monthly to N581.59 billion, caused by a rise in transactions from retail and institutional investors.

How FX inflows lifted the naira

Also, foreign investor inflows grew after a month of decline by 88.5% monthly to N118.91 billion from N63.07 billion in April, due in part to moderating fixed-income yields and improved market confidence.

Net inflows dropped by 54.0% to N2.64 billion in May from N5.74 billion in April, caused by strong net FX inflows of N13.31 billion outweighing net domestic outflows of N10.67 billion.

According to analysts at Cordros Capital Limited, in the near term, domestic investors will remain the main drivers of the transaction value, supported by an expected decline in fixed-income yields.

They maintained that the naira’s relative stability may encourage increased participation from foreign investors in the equities market.

CBN crashes the dollar for importers

Legit.ng earlier reported that the Nigerian currency rallied against the US dollar for two consecutive days on Thursday, June 26 and Friday, 27, 2025, closing the week strong in the official window.

The naira appreciated following the intervention of the Central Bank of Nigeria in the foreign exchange market.

At the close of trading on Friday, June 27, the local currency inched higher, closing at N1,537.90 against the US greenback from N1,547 per dollar, the previous day.

Proofreading by Kola Muhammed, copy editor at Legit.ng.

Source: Legit.ng