Naira gains, external reserve decline despite oil pricerally

The naira strengthened further on Monday, closing at N1,544.62 per US dollar, up 0.3% from Friday’s rate of N1,549.35 at the Nigerian Foreign Exchange Market (NFEM), according to data published by the Central Bank of Nigeria (CBN).

However, despite the recent rally in global oil prices, Nigeria’s external reserves declined slightly to $37.93 billion as of June 13, 2025, down from $38.02 billion recorded on June 11, 2024, CBN data showed.

According to a report from the Research Department of Coronation Merchant Bank, Brent crude saw a sharp 11.67% week-on-week increase last week, its largest weekly gain in years, closing at $74.23 per barrel. This rebound narrowed Brent’s year-to-date loss to -0.55%, compared to -10.95% the previous week. The average price of Brent in 2025 now stands at $75.08 per barrel, reflecting a 5.98% decline from the 2024 average of $79.86 per barrel.

Similarly, Bonny Light crude surged by 12.86% to $77.73 per barrel, trading at a premium of $3.50 per barrel over Brent. This positive movement brings prices closer to the $75 benchmark set in Nigeria’s 2025 budget.

The Coronation report also noted that the naira gained N3.76 (or 0.24% week-on-week) at the NFEM, closing at N1,549.35 per dollar last week. The appreciation was largely driven by inflows from foreign portfolio investors (FPIs), which pushed the naira to a midweek high of N1,539.72 per dollar.

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However, the currency weakened slightly by week’s end, following the CBN’s disclosure that it had injected approximately $580 million into the market in May to support the naira, complementing other inflows.

In the parallel market, the naira depreciated by 0.94%, closing at N1,600 per dollar.

Foreign portfolio investors were the dominant source of FX inflows for the fourth consecutive week, reflecting renewed confidence in the Nigerian economy. The momentum was bolstered by the Monetary Policy Committee (MPC) meetings held on May 19 and 20, where the CBN maintained the Monetary Policy Rate (MPR), building on a credit rating upgrade in April.

Non-bank corporates accounted for 37.36% of FX inflows, exporters contributed 23.08%, and other sources made up 0.57%. Notably, there were no direct FX inflows from the CBN last week, likely due to relative exchange rate stability and the broader weakening of the US dollar amid concerns over U.S. debt sustainability.

As of the last published data on Wednesday, the CBN’s gross foreign reserves stood at $38.02 billion, down by $256.73 million or 0.67% week-on-week.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.