Naira weakens to N1,375/$ as dollar steadies amid renewed Middle East tensions

The naira weakened slightly against the United States dollar on Monday, closing at N1,375/$ in the official foreign exchange market amid renewed global market uncertainty linked to rising tensions in the Middle East.

The latest figures released by the Central Bank of Nigeria (CBN) showed that the local currency depreciated from Friday’s closing rate of N1,364/$, even as the U.S. dollar held firm globally following concerns that prolonged geopolitical tensions could sustain inflationary pressures and keep interest rates elevated for longer.

The development comes as investors continue to monitor the impact of rising crude oil prices, global inflation expectations, and Nigeria’s external reserve position on exchange rate stability in the domestic foreign exchange market.

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What the data is saying

CBN data showed that the intraday trading during the session ranged between N1,367/$ and N1,375/$, with a simple average rate of N1,372.98/$.

• NFEM interbank turnover stood at $51.17 million across 67 deals, compared to $78.15 million recorded across 91 deals on Friday.

Brent crude futures rose to $104.55 per barrel, while U.S. West Texas Intermediate traded around $98.17 per barrel amid fears that Middle East tensions could disrupt global energy supply.

• The dollar index, which tracks the greenback against six major currencies, remained relatively stable at 97.98 as investors sought safe-haven assets.

The latest exchange rate movement follows a period of relative stability for the naira, which had strengthened throughout much of April and the first week of May.

More Insights

Global financial markets remained cautious on Tuesday as diplomatic efforts aimed at ending the Middle East conflict showed limited progress, raising concerns over the sustainability of the fragile ceasefire announced earlier in April.

U.S. President Donald Trump reportedly described the ceasefire with Iran as being “on life support,” while investors worried that prolonged geopolitical instability could sustain higher crude oil prices and complicate global inflation trends.

While stronger crude prices could improve oil export earnings and support foreign exchange inflows, they may also worsen imported inflation and increase pressure on Nigeria’s domestic energy costs.

Meanwhile, attention is also turning to upcoming U.S. inflation data, which economists expect could reinforce expectations that the U.S. Federal Reserve may delay interest rate cuts this year. Higher U.S. rates typically strengthen the dollar globally and increase pressure on emerging market currencies, including the naira.

The latest exchange rate movement also comes amid a decline in Nigeria’s external reserves.

Nairametrics earlier reported that the country’s gross external reserves fell by approximately $855 million within five weeks, dropping from $49.18 billion on April 1, 2026, to $48.33 billion as of May 7, 2026.

**What you should know **

Prior to the reforms introduced under President Tinubu, Nigeria operated a tightly managed foreign exchange regime in which the central bank played a dominant role in supplying foreign currency and maintaining multiple exchange rate windows.

Despite the recent dip, the Central Bank of Nigeria maintains an optimistic outlook for the country’s external reserves.

• The apex bank had previously projected that reserves could reach $51 billion by the end of 2026 as part of its broader macroeconomic stabilization and confidence-restoration agenda.

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