Naira Strengthens to N1,348/$ Amid Rising Global Tensions Between U.S. and Iran

The Nigerian currency, the Nigerian Naira, strengthened slightly against the United States Dollar at the official foreign exchange market, trading around N1,348 per dollar as market participants reacted to evolving global economic and geopolitical developments.

The latest movement reflects continued consolidation of the Naira following its recent appreciation streak after the exchange rate peaked at N1,389/$ earlier in the month.

Data from the official market showed that the Naira gained approximately 0.3 per cent against the dollar, dipping to an intraday low of N1,346.6/$ in early trading before settling around N1,348/$.

Naira strengthens since start of 2026

The local currency has recorded a noticeable recovery since the beginning of 2026, strengthening from about N1,440/$ in January. Analysts attribute the improved performance to stronger foreign exchange liquidity and sustained interventions by the Central Bank of Nigeria.

Monetary authorities have intensified efforts to stabilise the currency through targeted market interventions and periodic foreign exchange sales, which have helped ease volatility in the official market.

In addition, improved crude oil prices and rising foreign reserves have strengthened the government’s capacity to defend the currency. Nigeria’s external reserves are currently estimated at nearly $48 billion, providing increased financial buffers for foreign exchange management.

Parallel market maintains premium

Despite the gains recorded at the official market, the parallel or black market—widely used by small businesses and individuals—continues to quote the dollar at a premium.

Foreign exchange traders in major commercial centres such as Lagos and Abuja still offer the dollar at rates slightly above the official market price. However, analysts note that the gap between the two markets has narrowed significantly following monetary reforms implemented over the past year.

Currently, the difference between official and parallel market rates is estimated at less than five per cent, compared to wider spreads observed in previous years.

Frequent dollar auctions to licensed Bureau De Change (BDC) operators have also helped stabilise the retail segment of the market by improving access to foreign currency.

Interest rates attracting foreign investors

Another factor supporting the Naira’s relative stability is Nigeria’s high domestic interest rate environment, which continues to attract some foreign portfolio investors seeking better yields.

Market observers note that sustained investor interest in Nigeria’s fixed-income instruments has improved foreign exchange inflows and supported liquidity in the currency market.

Possible outlook for the Naira

Currency analysts say the near-term outlook for the Naira depends largely on whether the exchange rate breaks key technical levels.

A bearish scenario for the dollar (meaning Naira appreciation) could emerge if the exchange rate falls below the N1,340/$ support level, potentially pushing the currency toward the psychological N1,300/$ mark.

Such a scenario could be supported by improved oil production, stronger reserves, and continued foreign exchange inflows.

Conversely, a bullish scenario for the dollar (Naira depreciation) could occur if the rate climbs above N1,360/$, opening the possibility of a retest of the N1,380/$ range. Analysts say this could happen if corporate demand for foreign exchange rises sharply or if political or economic shocks reduce oil revenues.

Global tensions boost demand for the dollar

Meanwhile, the global outlook for the dollar has strengthened slightly amid renewed geopolitical tensions between the United States and Iran.

The US Dollar Index—which tracks the value of the dollar against a basket of major global currencies—was trading around 98.3, reflecting modest gains in the greenback.

The movement followed rising tensions after Iran accused the United States of escalating hostilities in the region. According to statements by Iranian Foreign Ministry spokesman Esmail Baghaei, a reported U.S. blockade of Iranian coastlines and ports constitutes an act of aggression that violates an existing ceasefire arrangement.

Iran also announced it would not participate in a planned second round of negotiations with the United States ahead of the expiry of a Middle East ceasefire scheduled for April 22.

U.S. President Donald Trump has reportedly instructed American negotiators to travel to Pakistan for further diplomatic consultations.

The rising geopolitical uncertainty has prompted investors to shift toward traditional safe-haven assets, including the U.S. dollar, as concerns grow over the stability of the region.

Strategic importance of the Strait of Hormuz Analysts say developments in the Middle East remain particularly sensitive for global markets due to the strategic importance of the Strait of Hormuz, a key passage for international oil shipments.

Any disruption in the area could affect global energy supply and potentially influence currency markets, including oil-dependent economies such as Nigeria.
Despite the dollar’s modest global gains, technical indicators suggest that the dollar index still maintains a near-term bearish bias, as it continues to trade below key short-term averages.

Market analysts note that both the nine-period and fifty-period exponential moving averages have turned into resistance levels after being broken, indicating that any short-term rebound in the dollar may face renewed selling pressure.