Naira exchanges at N1,385/$ in renewed rally
The naira yesterday recorded significant gains at the parallel markets exchanging at N1,385 to dollar, stronger than N1,395 to dollar it exchanged at the weekend. At the official market, the
The naira yesterday recorded significant gains at the parallel markets exchanging at N1,385 to dollar, stronger than N1,395 to dollar it exchanged at the weekend.
At the official market, the local currency closed at N1,365 to dollar creating N60 per dollar gap between the official and parallel market rates. .
The renewed rebound for the local currency has been linked to a spike in oil prices, with oil markets reacting sharply to the renewed hostility in the Middle East.
International benchmark Brent jumped more than five per cent to trade near $114 a barrel, while WTI crude climbed near $105.
A fragile four-week ceasefire between the United States and Iran appears to be on the brink of collapse following a violent exchange of fire in the Persian Gulf on Monday. The flareup drew in the United Arab Emirates (UAE) and sent global oil prices soaring as threats to the strategic Strait of Hormuz intensified.
The naira and foreign reserves are bound to benefit from the development. The key reforms instituted by the Olayemi Cardoso-led Central Bank of Nigeria (CBN), have also increased the possibility for the local currency and external reserves to benefit from the oil windfall.
Rising threats of US–Iran military action have led analysts to project that oil prices may remain high amid heightened geopolitical risks, US restrictions on Russian oil purchases, and sustained Chinese demand, even as markets entered the year expecting a large oversupply
For Nigeria, oil prices increase comes with significant gains in. terms of revenue, and economy stability given that over 80 per cent of the country’s income are from petrodollars.
President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said the naira has remained stable across markets for several months, ending years of volatility in the market.
Additionally, Managing Director of Financial Derivatives Company (FDC), Bismarck Rewane, posits that the local currency is undervalued by approximately 11 per cent when assessed using the purchasing power parity (PPP) model.
Rewane made the submission during his keynote address at the 2026 Economic Outlook organised by the Association of Corporate Treasurers of Nigeria (ACTN), where he anchored the session and offered a detailed analysis of the structural and cyclical factors influencing Nigeria’s exchange-rate movements.
He noted that currencies typically converge towards their PPP-implied values over a five-year horizon.
The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso explained that naira now trades within a narrow, stable range. The huge gap between the official and parallel markets has shrunk significantly, from over 60 per cent in 2023.
For him, macroeconomic indicators show that Nigeria is more resilient to external shocks today than at any point in recent history.
