Naira Holds Steady at ₦1,608/$1 as Oil Prices Rebound, Experts Urge Policy Reform

The Nigerian naira maintained relative stability in the parallel market on Tuesday, trading around ₦1,608–₦1,610 per dollar amid a rebound in Brent crude prices. Despite a month-on-month drop of over 15% in oil prices, Brent crude rose to $61.97 per barrel, offering a glimmer of hope for Nigeria’s oil-dependent economy. The naira’s steadiness reflects cautious optimism that increased oil revenues could improve foreign exchange liquidity in the short term.

Recent interventions by the Central Bank of Nigeria (CBN), including monetary tightening and liquidity management, have helped restore some investor confidence and stabilize the naira in both the official and informal markets. However, foreign exchange supply remains insufficient, and analysts warn that underlying pressures persist. The narrowing of the rate gap has reduced arbitrage but has not eliminated structural vulnerabilities in the FX system.

The modest uptick in Nigeria’s crude oil production—now at 1.4 million barrels per day—falls short of the OPEC quota but still offers potential revenue gains if sustained. A combination of technical market factors and OPEC+ reassurances has helped push prices higher, temporarily easing bearish sentiment toward the naira. Yet, experts stress that long-term stability hinges on consistent output and coordinated policy execution.

Analysts like Johnson Chukwu and Amaka Okafor caution that while rising oil prices offer fiscal breathing room, the benefits will only be realized if Nigeria addresses fundamental issues. These include boosting oil production, curbing theft and subsidies, and implementing credible FX policies. Without structural reforms and macroeconomic discipline, temporary gains from oil markets will not guarantee exchange rate stability or economic resilience.

Source: The sun