Naira weakens despite stronger FX turnover as demand pressure persists

The naira depreciated further against the United States dollar on Monday at the Nigerian Foreign Exchange Market (NFEM), as persistent demand for foreign currency outweighed improved market liquidity and stronger interbank inflows.

Data published by the Central Bank of Nigeria showed that the local currency closed at N1373.70 per dollar, compared with N1371 recorded at the close of trading last week, extending the naira’s recent losing streak amid sustained pressure in the foreign exchange market.

The latest depreciation came despite a notable increase in FX turnover at the official market window, signalling that supply conditions improved marginally during the trading session.

According to the CBN’s daily FX report, transactions at the official window were executed within an intraday high of N1374.50 and a low of N1370 per dollar.

Interbank FX turnover rose sharply to about $76.296 million across 92 deals on Monday, compared with $48.487 million recorded during the previous trading session, reflecting stronger market activity and increased dollar liquidity.

However, analysts said demand for foreign payments by eligible market participants continued to outpace available supply, keeping the local currency under pressure despite the liquidity rebound.

The naira also weakened in the parallel market, where it traded around N1390 per dollar, indicating broad-based selling pressure across both official and informal segments of the currency market.

Analysts at Cowry Asset Management Limited said the naira is likely to remain under pressure in the near term due to sustained FX demand and fragile external liquidity conditions.

According to the investment firm, although rising crude oil prices and improving oil production levels could provide some support to Nigeria’s foreign exchange earnings, global oil market volatility and geopolitical uncertainties continue to limit the outlook.

“The nation’s external position is likely to remain fragile, with the naira expected to trade within a weak and volatile range absent stronger FX inflows or additional policy support,” analysts stated.

Meanwhile, fresh data from the Nigerian Upstream Petroleum Regulatory Commission showed that Nigeria’s crude oil production sustained its recovery momentum in April 2026.

The commission’s latest Oil Production Status Report revealed that average daily crude oil production rose by 7.6 per cent month-on-month to 1.49 million barrels per day in April, representing an increase of 105,697 barrels from the 1.38 million barrels per day recorded in March.

The April production figure represents the highest crude oil output achieved so far in 2026 and marks the second consecutive monthly increase following disruptions earlier in the year linked to maintenance work on the Bonga Floating Production Storage and Offloading vessel.

Including condensates, Nigeria’s total oil production rose to 1.66 million barrels per day in April from 1.55 million barrels per day in March, supported by stronger condensate output.

Industry analysts attributed the sustained improvement in production to declining crude oil theft, reduced pipeline vandalism, recovery in production from repaired terminals and contributions from new upstream assets.

One of the strongest production gains came from the Cawthorne stream, which boosted output significantly to 929,055 barrels in April from 382,689 barrels when production commenced in January.

Despite the recovery, analysts noted that Nigeria’s projected average crude oil production of about 1.71 million barrels per day for 2026 still falls short of the Federal Government’s target of 2.06 million barrels per day.

The shortfall continues to raise concerns over Nigeria’s ability to generate sufficient foreign exchange earnings needed to stabilise the naira and support external reserves amid rising import demand and debt servicing obligations.