Market News

Hope Moses-Ashike 

The naira has continued to maintain a steady, largely flat trading pattern, supported by the steady rise in Nigeria’s external reserves, even as the country grapples with a decline in crude oil production.

The currency’s resilience comes at a time when oil output, the nation’s major foreign exchange earner, has faced notable setbacks, yet underlying market confidence and improving inflows are helping to cushion the impact.

After market activities on Wednesday, the local currency weakened only slightly, depreciating by 0.5% as the dollar was quoted at N1,454.18 compared with N1,447.42 recorded on Tuesday at the Nigerian Foreign Exchange Market (NFEM), according to data published by the Central Bank of Nigeria (CBN).

In the parallel market, commonly referred to as the black market, the naira also lost some ground, sliding by N10 to close at N1,465 on Wednesday, down from the previous day’s level of N1,455.

Despite these marginal losses, Nigeria’s external reserves have continued to record consistent growth. The reserves rose to $44.04 billion as of November 18, 2025, based on figures posted on the CBN’s official website. This steady accumulation of reserves has been a major factor helping to stabilise the naira amid pressures from the oil sector.

A recent report by United Capital Plc noted that the naira experienced a significant strengthening in October 2025. According to the report, the average exchange rate appreciated by 2.62%, moving from N1,497.79 per US dollar in September to N1,459.54 in October. The currency closed October at N1,421.73 per US dollar, an improvement from N1,475.35 recorded at the end of September. United Capital attributed this positive performance to growing investor confidence, increased foreign exchange inflows, and a favourable trade balance driven by declining imports and rising exports.

However, the report also highlighted concerns in the oil sector, noting that crude oil output dropped to 1.39 million barrels per day (mbpd) in September, from 1.43 mbpd in August and 1.51 mbpd in July 2025. This decline was largely linked to a strike by oil workers, which affected production during the period. Crude oil prices have also weakened, with Bonny Light averaging US$72.09 per barrel year-to-date and sliding to $66.15 per barrel in October 2025, down from $70.20 in September.

Nevertheless, efforts are underway to raise crude oil output to 2 mbpd in the short term. Analysts at the United Capital say that a sustained increase in production would provide much-needed support for foreign exchange inflows. At the same time, the government is accelerating initiatives to boost non-oil exports, a strategy expected to enhance the stability of the exchange rate and further strengthen the naira over time.