Naira ends week mixed as official rate gains, black market slips

Nigeria’s foreign exchange market closed the week with a mixed performance, as the naira posted a modest gain at the official window while slipping further on the parallel (black) market.

The movement comes amid falling foreign reserves, moderating inflation, and geopolitical tensions that buoyed oil prices.

According to data published by the Central Bank of Nigeria (CBN), the official exchange rate settled at N1,545/$1 on Friday, a slight appreciation from N1,546/$1 recorded on Thursday.

The naira had traded at N1,541/$1 on both Monday and Tuesday before weakening midweek to N1,547.5/$1 on Wednesday and then recovering by the end of the week.

Conversely, in the parallel market, the naira depreciated steadily. It opened the week at N1,590/$1 on Monday and fell to N1,605/$1 by Friday.

The rate remained flat at N1,600/$1 between Tuesday and Thursday before weakening further on the final trading day, according to market surveillance in Lagos.

The fluctuations in the exchange market were accompanied by a continued decline in Nigeria’s external reserves.

CBN data shows that reserves dropped to $37.713 billion on Thursday, down from $37.736 billion on Wednesday, $37.78 billion on Tuesday, and $37.823 billion at the start of the week on Monday.

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This consistent dip underscores ongoing pressure on the country’s foreign exchange buffer.

However, analysts noted that the naira’s broader outlook may be supported by improving economic fundamentals.

Nigeria’s headline inflation eased for the second consecutive month, falling to 22.97% in May 2025 from 23.71% in April, according to the National Bureau of Statistics (NBS).

The development suggests that inflationary pressures may have peaked, offering some relief for monetary authorities.

A rally in global crude oil prices also lent support to the naira’s fundamentals. Prices surged over the weekend following a large-scale preemptive strike by Israel on Iran, stoking fears of a broader conflict in the Middle East and potential disruptions to vital oil supply routes. As a major oil-exporting country, Nigeria’s foreign exchange earnings are heavily tied to oil revenues.

In response to the evolving economic landscape, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, met with the CBN Governor, Mr. Olayemi Cardoso, and top officials of the apex bank earlier in the week.

The meeting, according to a statement by the Federal Ministry of Finance, was part of ongoing efforts to better harmonize fiscal and monetary policies.

The discussions reportedly centered on sustaining the current momentum in inflation moderation, stabilizing the naira, boosting investor confidence, and fostering private sector-driven growth.

Despite near-term volatility, analysts remain cautiously optimistic that the combination of easing inflation, firmer oil prices, and policy coordination could lay the groundwork for improved macroeconomic stability in the second half of the year.