The naira appreciated to N1,365 per dollar on Thursday, gaining modestly against the U.S. currency amid a broader global weakening of the greenback.
Data from the Central Bank of Nigeria (CBN) showed the local currency improved from N1,369/$ recorded on Wednesday, reflecting firmer sentiment across foreign exchange markets.
The dollar is on track for its largest weekly decline since January, pressured by easing geopolitical tensions following optimism that a ceasefire in the Gulf region will hold and support the resumption of oil shipments.
Market participants are also closely watching ongoing diplomatic engagements between the United States and Iran in Islamabad, which are expected to shape near-term currency movements.
At the close of trading on Thursday, the naira traded within a band of N1,351.5/$ to N1,365/$, with an average rate of N1,359.9/$.
Nigeria’s external reserves, however, declined to $48.89 billion from $49.18 billion at the beginning of April, extending a downward trend observed since mid-March.
Across global markets, the U.S. dollar weakened broadly, with the dollar index shedding about 1.3 per cent this week as investors unwound safe-haven positions.
Major currencies posted gains against the dollar. The euro rose to $1.1690, while the Australian and New Zealand dollars recorded weekly gains of nearly 3 per cent. The British pound also advanced by 1.8 per cent to $1.3424, breaking above its 200-day moving average.
The Japanese yen remained relatively weak but edged slightly higher to 159.2 per dollar, while China’s yuan strengthened to 6.83 per dollar in offshore trading—its highest level since 2023.
Analysts attribute the dollar’s recent decline to easing geopolitical risks and expectations of improved crude oil supply through the Strait of Hormuz.
In March, heightened tensions in the Middle East—particularly the U.S.-Israel conflict involving Iran—had driven investors toward the dollar as a safe-haven asset, boosting its value and pushing oil prices higher.
With the announcement of a ceasefire earlier this week, those positions have begun to unwind, leading to a shift toward risk-sensitive currencies.
Despite the truce, uncertainty lingers, as shipping activity through the Strait of Hormuz remains below pre-conflict levels, with significantly fewer vessels transiting the route compared to the estimated 140 ships per day recorded before the crisis.
Meanwhile, the CBN has maintained a positive outlook for Nigeria’s external reserves, projecting a rise to $51.04 billion in 2026 from $45.01 billion in 2025.
The anticipated growth is expected to be driven by increased oil revenues, planned sovereign bond issuances, and stronger diaspora remittances.
