The Nigerian naira appreciated to N1,365 per dollar on Thursday, strengthening slightly from N1,369/$ recorded on Wednesday, according to data published on the Central Bank of Nigeria (CBN) website.
The gain comes amid a broader decline in the U.S. dollar across global markets, as the greenback heads for its largest weekly loss since January. Analysts attribute the dollar’s weakness to improving geopolitical sentiment, particularly optimism surrounding a ceasefire in the Gulf region and expectations that oil shipments will resume.
Market data shows the naira traded within a range of N1,351.5/$ to N1,365/$ on Thursday, with an average exchange rate of N1,359.9/$. The local currency’s appreciation aligns with a wider trend of dollar depreciation, as investors begin to unwind safe-haven positions accumulated during heightened geopolitical tensions in March.
The U.S. dollar index has fallen by approximately 1.3% this week, reflecting a shift in investor sentiment following the ceasefire agreement. The easing of tensions has reduced demand for the dollar, which had previously strengthened due to its safe-haven appeal during the U.S.-Israel conflict involving Iran.
Further direction in currency markets is expected to depend on the outcome of ongoing diplomatic engagements between the United States and Iran, currently taking place in Islamabad.
Meanwhile, Nigeria’s external reserves declined to $48.89 billion, down from $49.18 billion at the beginning of April, continuing a downward trend observed since mid-March.
Across global markets, major currencies have strengthened against the dollar. The euro rose to $1.1690, while the Australian and New Zealand dollars posted gains of nearly 3% for the week. The British pound also advanced by 1.8% to $1.3424, surpassing its 200-day moving average. The Chinese yuan appreciated to 6.83 per dollar in offshore trading, its strongest level since 2023, while the Japanese yen traded at 159.2 per dollar, slightly above recent lows.
These movements underscore a broader shift by investors away from safe-haven assets toward risk-sensitive currencies, driven by easing geopolitical concerns and expectations of improved oil supply flows through the Strait of Hormuz.
However, uncertainties remain. Shipping activity in the Strait of Hormuz is still below normal levels, with only a limited number of vessels passing through daily compared to roughly 140 ships before the conflict.
Despite the recent decline in external reserves, the CBN has maintained a positive outlook. The apex bank projects that reserves will increase to $51.04 billion in 2026, up from an estimated $45.01 billion in 2025. This anticipated growth is expected to be supported by higher oil revenues, sovereign bond issuances, and increased diaspora remittances.
