The Naira appreciated to N1,365/$ on Thursday, gaining against the U.S. dollar amid a broader global decline in the greenback.
Data on the Central Bank of Nigeria’s (CBN) website shows the local currency strengthened from N1,369/$ recorded on Wednesday, reflecting improved sentiment in global currency markets.
The development comes as the dollar heads for its largest weekly drop since January, driven by optimism that a ceasefire in the Gulf will hold and oil shipments will resume.
Further market direction is expected to depend on the outcome of ongoing diplomatic talks between the United States and Iran in Islamabad.
What the data is saying
The naira’s appreciation aligns with a broader weakening of the U.S. dollar across global markets.
- The U.S. dollar index has fallen by 1.3% this week as investors unwind safe-haven positions following the ceasefire agreement.
- The naira closed at N1,365/$ on Thursday, trading within a range of N1,351.5/$ to N1,365/$, with an average rate of N1,359.9/$.
- Nigeria’s external reserves declined to $48.89 billion, down from $49.18 billion at the start of April, continuing a downward trend since mid-March.
- Major currencies gained against the dollar, with the euro trading at $1.1690, while the Australian and New Zealand dollars posted weekly gains of nearly 3%.
The weakening dollar reflects easing geopolitical tensions and expectations of improved oil supply flows through the Strait of Hormuz.
Get up to speed
The dollar had strengthened significantly in March as geopolitical tensions in the Middle East triggered a flight to safety among investors.
- The U.S.-Israel conflict with Iran drove oil prices higher, pressured global equities, and increased inflation concerns.
- Investors shifted to the dollar as a safe-haven asset, boosting its value against major currencies.
- Since the ceasefire agreement earlier in the week, these positions have begun to unwind, leading to a broad-based dollar decline.
Despite the ceasefire, uncertainty remains, as shipping activity through the Strait of Hormuz is still below normal levels, with only a few vessels passing through compared to about 140 ships daily before the conflict.
More Insights
Global currency movements highlight shifting investor sentiment following the ceasefire.
- The British pound rose by 1.8% this week to $1.3424, breaking above its 200-day moving average.
- The Japanese yen remained under pressure but traded slightly above recent lows at 159.2 per dollar.
- China’s yuan strengthened to 6.83 per dollar in offshore trading, its highest level since 2023.
These movements indicate a broader shift away from safe-haven assets toward risk-sensitive currencies as geopolitical tensions ease.
What you should know
The Central Bank of Nigeria (CBN) had earlier projected a positive outlook for the country’s external reserves despite recent declines.
- The apex bank expects reserves to rise to $51.04 billion in 2026 from $45.01 billion in 2025.
- The projected increase is expected to be driven by higher oil earnings, sovereign bond issuances, and increased diaspora remittances.
