Exchange Rate Improves as Growth Optimism Boosts Naira Demand
The naira recorded a market-wide rally as Nigeria’s economy expanded in the first quarter of 2026, according to the statistics office, with FX data showing the dollar retreated on Middle East hope.
The National Bureau of Statistics (NBS) has released the Q1 2026 GDP figures, showing that Nigeria’s economy expanded by 3.89% year-on-year, up from 3.13% in Q1 2025.
Growth optimism fueled demand for the naira, as analysts anticipate the Central Bank of Nigeria’s (CBN) OMO bills auction will drive FX inflows from foreign portfolio investors.
In its daily FX update, the CBN said the naira appreciated by 0.04% to ₦1,374.92/$ at the Nigerian Foreign Exchange Market (NFEM) window.
The official rate hovered between N1373 and N1377 per dollar at the NFEM window, and FX interbank turnover fell to $55.786 million across 71 deals from $62.344 million at Friday’s close.
US dollar liquidity boost is anticipated to drive demand for the local unit ahead of possible OMO bills sales to offshore investors during the week.
In the parallel market, the naira gained N5 to close at N1390 per dollar, according to channel checks, reflecting broad-based buying interest in the local currency across both the official and informal foreign exchange segments.
Consequently, the market spread narrowed to N15.08/USD from N18.54/USD on Friday. Nigeria’s external reserves improved to USD48.98 billion from USD48.89% on the latest round of inflows from hydrocarbon sales and other sources.
Crude oil markets experienced heavy selling pressure on Monday as investors reacted to signs of progress in negotiations between the United States and Iran.
West Texas Intermediate futures plunged roughly 8%, falling below the important $90 per barrel level, while Brent Crude declined around 7% toward $93 per barrel. The latest move extended last week’s sharp decline and marked one of the largest short-term pullbacks in oil prices this year.
The selloff accelerated after reports suggested the United States and Iran are moving closer toward a broader agreement that could eventually reduce disruptions to global energy flows. Traders now see a clearer path toward restoring oil shipments through critical Middle Eastern trade routes.
At the center of market attention is the Strait of Hormuz, one of the world’s most strategically important shipping corridors. Roughly one-fifth of global oil and liquefied natural gas exports move through the narrow waterway, making any disruption there highly significant for global energy markets.
Recent reports indicated that the United States and Iran are discussing plans that could allow the strait to reopen fully within approximately 30 days. If flows resume at normal capacity, global supply conditions could improve rapidly, placing further downward pressure on crude prices.
Markets responded quickly to the possibility of easing supply constraints, particularly after months of geopolitical tension had fueled fears of prolonged disruptions in energy shipments. Nigeria’s Capital Market Enters Fast Lane as NGX Adopts T+1 Settlement Cycle
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