SAT MAY 09 2026-theGBJournal| The naira posted a strong performance during the week, appreciating by 1.2% week-on-week to close at N1,360.00/USD in the official market.
The currency’s gain was largely driven by increased inflows from offshore investors, which helped offset persistent demand pressure from local market participants and supported overall market liquidity.
Positive sentiment also extended across the forwards market, where the naira strengthened across all major contract tenors. The 1-month forward contract appreciated by 1.2% to N1,384.53/USD, while the 3-month tenor gained 1.2% to settle at N1,424.08/USD.
Similarly, the 6-month and 1-year contracts appreciated by 1.3% and 1.5% to N1,478.39/USD and N1,586.56/USD, respectively, reflecting improved near-term confidence in the currency outlook.
Despite the naira’s resilience, Nigeria’s external reserves remained under pressure.
Gross external reserves declined by USD40.00 million to USD48.33 billion as of 7 May 2026, extending the current streak of weekly declines to eight consecutive weeks.
The persistent drawdown highlights the continued impact of FX market interventions and external obligations on reserve levels.
Looking ahead, the naira is expected to remain relatively stable in the near term, supported by attractive domestic yields and a still-favorable external environment that continues to encourage foreign portfolio inflows.
However, market sentiment remains cautious amid lingering geopolitical tensions arising from the ongoing US–Iran conflict, which could moderate the pace of offshore inflows compared to levels seen before the escalation.
Nonetheless, should FX demand pressures intensify, the Central Bank of Nigeria (CBN) is expected to maintain a measured intervention strategy aimed at preserving market stability and limiting excessive exchange rate volatility.
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