The foreign exchange market recorded stronger performance for the naira across key trading segments during the week under review.
At the official Nigerian Autonomous Foreign Exchange Market (NAFEM) window, the local currency appreciated by 0.89% week-on-week to close at N1, 501.50/$1, buoyed by improved liquidity and sustained dollar inflows. Likewise, the parallel market posted a 1.85% gain, with the naira strengthening to an average of N1,510/$1.
This broad-based uptick reflects renewed trader confidence and a moderation of speculative pressures in the informal market.
Crude oil prices are set to end the week lower, weighed down by renewed concerns over slowing global demand. The International Energy Agency (IEA) cut its 2025 demand growth forecast to 750,000 barrels per day, citing muted consumption in emerging markets and a looming contraction in OECD demand.
In contrast, OPEC struck a more optimistic tone, projecting growth of 1.3 million barrels per day this year and 1.4 million next year, driven primarily by non-OECD countries.
Beyond the demand outlook, traders remain cautious about China’s ability to sustain its aggressive stockpiling—already amounting to 187 million barrels this year—and the un- certain impact of fresh Western sanctions on Russian oil exports.
These concerns have reinforced bearish sentiment, keeping prices under pressure de- spite the divergent projections from the IEA and OPEC.
In contrast to the global trend, Nigeria’s Bonny Light crude gained 2.16% to close at $68.56 per barrel. On the macroeconomic front, the country’s external reserves inched higher by 0.19% week-on-week to $41.62 billion from $41.54 billion, supported by stronger foreign inflows.
Although modest, this incremental build-up provides a critical buffer against external vulnerabilities such as volatile oil prices and currency pressures. It also enhances the Central Bank of Nigeria’s (CBN) capacity to intervene in the foreign exchange market, when necessary, thereby helping to stabilize the naira.
In this new week, it is expected that the naira will likely maintain its current trend of appreciation, supported by steady dollar inflows, CBN interventions, and stronger external re- serves. However, renewed speculative activity could spark volatility. In the oil market, bearish demand forecasts may keep global prices under pressure, though Nigeria’s resilient Bonny Light and gradual reserve build-up provide buffers that could help sustain near-term currency stability.
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