Nigeria’s currency, the naira, is facing more pressure as it continues to drop against the US dollar. A major reason is the fall in global oil prices, which is reducing the country’s dollar earnings and weakening its foreign reserves.
According to a report from Legit.ng, crude oil prices fell by 15.5% in April 2025, pushing the benchmark Brent crude to $63.12 per barrel—the steepest monthly drop in over three years. This has made it harder for the Central Bank of Nigeria to stabilize the naira through foreign exchange interventions.
The report notes that renewed trade tensions between the United States and China are partly to blame. Although oil was exempted from new tariffs announced by former President Trump, the global market reacted negatively as uncertainty over Chinese oil demand grew.
Afrinvest, an investment firm, warned that this development could impact Nigeria’s economic balance. “April was a volatile month in the oil market as global trade tensions from Trump’s ‘liberation day’ tariff policy shook the energy market,” an analyst from the firm stated.
At the Nigerian Foreign Exchange Market, the naira closed at ₦1,606 per dollar on April 4, 2025. This marked a slight drop from the previous day’s rate of ₦1,602.
Trading data showed that intra-day rates ranged from ₦1,600 to ₦1,606.5 per dollar on that Friday, suggesting a narrow band of movement. However, demand for dollars continues to outstrip supply, pushing the naira further down in both the official and parallel markets.
Traders in the black market have also been quoting the dollar above ₦1,600. With foreign exchange inflows decreasing, investors remain cautious about the outlook.
The Central Bank is under pressure to manage dwindling reserves while meeting dollar demands for imports and other financial obligations. Analysts caution that unless oil prices recover or new sources of forex are secured, the strain on the naira may continue.
Article updated 4 weeks ago. Content is written and modified by multiple authors.
