The Nigerian Naira recorded its first appreciation against the US dollar in the official foreign exchange market in three weeks, closing at N1,401.40 on Tuesday. This represented a strengthening of N4.20 from the previous day’s rate of N1,405.62, according to data from the Central Bank of Nigeria (CBN).
The movement marks a pause in a sustained depreciation trend that began after the currency last gained on February 17, when it traded at N1,335.96 per dollar. The official market rate is a key benchmark set by the central bank and is distinct from the parallel, or black, market where the currency remained unchanged at N1,420 per dollar on Tuesday.
This shift in the official rate coincided with a decline in global crude oil prices. Brent and West Texas Intermediate crude fell below $90 per barrel on Tuesday, the first time prices dipped to that level since geopolitical tensions escalated in late February. Lower oil prices impact Nigeria’s foreign exchange earnings, as crude exports account for the majority of foreign currency inflows.
A direct domestic effect of falling crude prices was observed at the Dangote Refinery, which reduced its gantry petrol price to N1,075 per litre. This price adjustment follows three previous hikes, reflecting the linkage between international oil costs and local fuel pricing in a deregulated market.
Separately, the CBN reported that Nigeria’s gross external reserves stood at $49.94 billion as of March 6. The reserve position is a critical buffer for the country’s external payments and influences confidence in the foreign exchange market.
The Naira’s modest gain in the official window occurs against a backdrop of persistent pressure in the parallel market and volatile global commodity prices. While the immediate appreciation provides temporary relief, the sustainability of the trend will depend on the central bank’s ongoing interventions and the trajectory of oil revenues, which remain fundamental to Nigeria’s foreign exchange stability.
