Naira Strengthens to N1,348 Per Dollar Amid US–Iran Tensions and FX Market Pressure

The Nigerian naira continued its steady recovery on Monday, strengthening to N1,348 per US dollar in the official market amid renewed global uncertainty driven by rising tensions between the United States and Iran. The local currency briefly touched N1,346.6 before settling slightly higher, reflecting cautious trading activity.

Market data shows that the naira has gained momentum since earlier in the year, when it traded around N1,440/$ in January. Analysts attribute the improvement to better foreign exchange liquidity, ongoing interventions by the Central Bank, and relatively stable crude oil prices that have helped support Nigeria’s external reserves.

However, the parallel (black) market continues to tell a slightly different story, with the dollar trading at a premium in Lagos and Abuja. Despite the gap between official and unofficial rates narrowing to under five per cent, small businesses and individuals still rely heavily on the parallel market for quicker access to foreign currency.

Traders say frequent dollar allocations to Bureau De Change operators and stronger oil-related inflows have helped prevent excessive volatility in the naira. Nigeria’s external reserves, now nearing $48 billion, have also strengthened market confidence, while high domestic interest rates continue to attract foreign portfolio investors.

On the global front, the US dollar index (DXY) rose modestly to around 98.3, supported by renewed safe-haven demand after escalating US–Iran tensions. Uncertainty surrounding Middle East negotiations, including Iran’s withdrawal from talks and concerns over the Strait of Hormuz, has kept investors cautious, even as technical indicators suggest a short-term bearish outlook for the dollar.

source: nairametrics