By Adedapo Adesanya

The Naira returned from a two-day break on Friday, May 29, stronger against the United States Dollar by 16 Kobo or 0.01 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX), trading at N1,375.25/$1 compared with N1,375.41/$1 it was exchanged on Tuesday.

The local currency also appreciated in the same market window against the Pound Sterling during the trading session by N3.62 to sell for N1,848.62/£1 versus N1,852.26/£1, but lost N2.16 against the Euro to close at N1,601.48/€1 compared with the previous rate of N1,599.32/€1.

The official forex market was closed on Wednesday and Thursday for the Sallah break.

A look at the GTBank FX desk showed that the Naira gained N4 against the Dollar yesterday to quote at N1,379/$1, in contrast to Tuesday’s closing value of N1,383/$1, and at the black market, it improved its value by N5 to N1,380/$1 versus the preceding session’s N1,385/$1.

Market analysts noted that the Nigerian Naira outlook remains stable, citing the latest round of FX inflows, which have lifted gross external reserves to $49.259 billion. Some projected that the domestic currency will close the first half of 2026 stronger as the Central Bank of Nigeria (CBN) continues to inject FX inflows into the official market.

Also supporting expected stability is the continued government signal of growth. In his third year in office, in a speech on Friday, President Bola Tinubu inherited severe economic and structural challenges in 2023, including exchange-rate distortions, which he said have since been reformed.

“Multiple exchange rate windows and forex arbitrage created massive distortions, with Nigeria losing more than N8 trillion over three years to rent-seeking and speculative practices.”

According to the president, the situation required urgent and courageous decisions to avert a deeper economic crisis and fiscal collapse.

In the cryptocurrency market, US-Iran ceasefire hopes have failed to pull Bitcoin (BTC) and Ethereum (ETH) higher, with the two largest cryptocurrencies losing almost 3 per cent as cooling spot bitcoin ETF inflows reinforced the pullback. BTC dropped 0.3 per cent to sell for $73,456.95, while ETH dipped 0.1 per cent to trade at $2,013.29.

Further, TRON (TRX) went down by 2.1 per cent to $0.3427, and Cardano (ADA) dipped 0.4 per cent to close at $0.2348.

On the other hand, Binance Coin (BNB) jumped 4.7 per cent to $667.52, Ripple (XRP) grew by 2.00 per cent to $1.34, and Solana (SOL) expanded by 0.1 per cent to $82.27, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

By Adedapo Adesanya

The crude oil market shrank by more than 2 per cent on Friday as traders awaited a possible ceasefire deal among the United States, Israel and Iran.

Brent crude ‌settled at $92.05 a barrel after it lost $1.66 or 1.8 per cent, while the US West Texas Intermediate (WTI) finished at $87.36 a barrel, down $1.54 or 1.7 per cent.

The latest reports as of Friday suggest that the US and Iran are set to extend the ceasefire, which will include the reopening of the Strait of Hormuz. However, such an extension would need to be endorsed by U.S. President Donald Trump.

The US and Iran reportedly reached ​a tentative agreement on Thursday ⁠to extend a ceasefire and lift restrictions on shipping through the Strait of Hormuz.

The three-month war between the US and Iran has been marked ​by frequent chatter of an impending end to the conflict that would open the crucial Strait of Hormuz, used to ​transit one-fifth of the world’s oil and gas supply. Even with both sides suggesting an agreement was forthcoming, ⁠their characterisations of the deal were still somewhat different.

The closure of the waterway has driven energy prices sharply higher worldwide. Recent sessions have been volatile, with swings by as much as $6 for both ​benchmarks on conflicting signals over a potential reopening of the strait.

Traffic through the maritime chokepoint remains a small fraction of levels before the conflict, with analysts saying a reopening ​of the waterway would offer some immediate relief to the oil market, but a recovery is ​still uncertain.

Japan, which relies ⁠heavily on oil from the Middle East, last month registered a 66 per cent drop in crude oil imports compared with April last year.

Prices plunged by 19 per cent in May as traders and speculators bet on an extended ceasefire and an eventual US-Iran deal despite the biggest physical supply disruption in history. The slump in prices in May follows the biggest monthly surge in history in April, when oil rallied amid the worst supply disruption ever.

Traders spent most of the week looking beyond current supply shortages and focusing on the possibility that a ceasefire agreement could eventually bring barrels back to market, leading to selloffs.

US crude, petrol, and distillate stockpiles fell ​last week, according to the Energy Information Administration (EIA), as demand from refiners and consumers rose, while exports fell by 1.16 million barrels per day to 4.4 million barrels per day.

Nigeria’s foreign reserves rising to the $46.7 billion area has changed the mood around the naira. For a country that has spent years fighting dollar shortages, parallel market pressure, and nervous investor sentiment, that number feels like more than a headline. It feels like a cushion the market can finally see. Channels Television reported that Nigeria’s external reserves reached the $46.7 billion mark, helped by Eurobond proceeds and stronger foreign exchange inflows.

For traders in Lagos, Abuja, Port Harcourt, and Kano, reserves are not just central bank language. They affect liquidity, confidence, pricing, and the way buyers and sellers behave when dollar demand starts rising. A bigger reserve buffer is like extra fuel in the tank during a long trip. You still need good driving, but at least the fear of running empty is lower.

For anyone watching forex in Nigeria, this reserve build up matters because it can change how the market reads the naira. It does not mean the currency suddenly becomes risk free. It means the Central Bank of Nigeria has more room to manage pressure, support orderly trading, and calm panic when the market gets noisy.

Why Bigger Reserves Matter to the Naira

A strong reserve position tells traders that Nigeria has more external firepower. It can help the central bank meet foreign currency needs, manage short term shocks, and give investors more confidence that the country can handle external obligations.

Confidence Can Shift Market Behaviour

Currency markets run on confidence as much as numbers. When reserves are weak, importers may rush to buy dollars early because they fear scarcity. When reserves look stronger, that panic can reduce. You might see calmer pricing, narrower spreads, and fewer wild reactions to every rumour.

That is important in Nigeria, where the official and parallel markets have often moved with different moods. Stronger reserves can help traders believe that the market is less vulnerable to sudden stress.

The Central Bank Has More Room to Act

Reuters reported that Nigeria’s net foreign exchange reserves jumped to $34.8 billion by the end of 2025, while gross reserves also improved sharply. The Central Bank of Nigeria linked that improvement to stronger inflows, better reserves management, and reforms aimed at restoring confidence in the currency market.

That gives the central bank more room to guide the market. Not unlimited room, of course. But enough to make speculators think twice before betting too aggressively against the naira.

What This Means for Nigerian Traders

For traders, the biggest change is not just the reserve number itself. It is what the number may do to expectations. In forex, expectation can move price before policy does.

Naira Volatility May Become More Manageable

When reserves are healthier, the naira may still move, but the moves can become less disorderly. Traders may find that sudden panic spikes become less frequent if the market believes dollar supply is improving.

This matters for short term traders who watch intraday movement. It also matters for businesses that need to plan import payments. A trader in Lagos tracking USDNGN knows that confidence can change fast, but a stronger reserve position can make the market feel less like a guessing game.

Liquidity Is Still the Real Test

A reserve buffer only becomes meaningful when it improves actual access to dollars. Reuters reported that the CBN approved weekly foreign currency sales of up to $150,000 to licensed bureau de change operators as part of efforts to improve liquidity and broaden access to foreign exchange.

That is where traders should stay alert. If reserves rise but market access stays tight, pressure can return. The real question is simple: are dollars reaching the market smoothly?

Why This Is Bigger Than One Currency Pair

Nigeria’s reserve strength does not only affect USDNGN. It can shape inflation expectations, import costs, investor flows, and even sentiment toward local assets.

Importers May Feel Less Pressure

Many Nigerian businesses rely on imported goods, machinery, fuel, medicine, electronics, and raw materials. When dollar supply improves, pricing pressure can ease. It may not happen overnight, but it can reduce the sense of panic that often filters into consumer prices.

Think of a spare parts dealer in Ladipo or a medicine importer in Lagos. If dollar access becomes more predictable, pricing decisions become easier. That can slowly help business planning.

Investors Watch the Same Signal

Foreign investors also watch reserves closely. Stronger reserves suggest better external stability, and that can make Nigerian assets look less risky. It does not erase concerns about inflation, policy consistency, or oil production, but it helps the story.

For traders, this means reserves can influence more than the chart. They can affect the entire mood around Nigerian markets.

Conclusion

Nigeria’s $46.7 billion reserve war chest is a game changer because it gives the naira something markets always respect: backing. It can improve confidence, reduce panic demand, support liquidity efforts, and make traders rethink one way bets against the currency.

Still, reserves are not a magic shield. Oil earnings, dollar demand, inflation, policy discipline, and investor trust still matter. The smartest Nigerian traders will not treat this as a reason to relax. They will treat it as a signal to watch the market more closely, because when confidence returns, currency behaviour can change quickly.