Naira Records Mixed Performance Against U.S. Dollar This Week
The naira experienced a varied performance against the U.S. dollar in recent trading sessions, showing a slight decline in the official market but an appreciation in the parallel segment. This movement occurred as demand pressures eased in certain areas of the foreign exchange landscape.
Official and Parallel Market Movements
At the official window, the local currency slipped marginally by 0.02 per cent, closing at N1,380.79 per dollar. In contrast, it strengthened by 1.08 per cent in the parallel market to N1,378.08, supported by reduced demand in the open market segment. Nigeria's external reserves also saw a decline during this period, dropping by 0.37 per cent to $49.3 billion. Analysts attribute this dip to the settlement of foreign exchange obligations and sustained market interventions by the Central Bank of Nigeria aimed at stabilising the currency.
Global Commodities and Crude Oil Surge
In the global commodities market, crude oil prices surged sharply, with West Texas Intermediate crossing the $100 per barrel mark at the start of April. Prices were buoyed by renewed geopolitical tensions after former U.S. President Donald Trump signalled that tensions with Iran were unlikely to ease in the near term. As of the latest trading session, WTI rose by 9.3 per cent to $109.4 per barrel, while Brent crude gained 8.45 per cent to $109.60 per barrel. Nigeria's Bonny Light crude outperformed both benchmarks, climbing 9.32 per cent to $134.72 per barrel, offering potential support for the country's foreign exchange inflows.
Analyst Projections for Naira and Oil Prices
Cowry Asset Management Limited stated that the naira is likely to remain under modest pressure in the near term, citing persistent foreign exchange demand and continued interventions by the Central Bank. They noted that external reserves may continue to fluctuate as authorities balance foreign payment obligations with efforts to maintain currency stability. They projected that crude oil prices could remain elevated due to ongoing geopolitical risks and supply uncertainties. While higher oil prices may provide some cushion for Nigeria's foreign exchange earnings, volatility in global markets is expected to keep both the naira and oil benchmarks on a cautious path.
Secondary Bond Market Activity
Meanwhile, activity in the Nigerian secondary bond market closed the week on a subdued note, reflecting weak demand across most maturities. Trading remained largely quiet as investors adopted a cautious stance amid prevailing macroeconomic uncertainties. Consequently, average yields dipped slightly by 2 basis points to 7.45 per cent, indicating only mild interest in government securities despite attractive rates.
Federal Government Bond Auction Details
However, the Federal Government bond auction held on March 30, 2026, recorded strong investor participation, with total subscriptions reaching N931.51 billion against an offer of N750 billion, translating to a bid-to-offer ratio of 1.24 times. Demand was notably skewed toward longer-dated instruments, suggesting investors' preference to lock in higher yields.
- The April 2027 bond, offered at N250 billion, attracted N251.43 billion in bids, with N88.79 billion allotted at a stop rate of 16 per cent.
- The February 2032 bond saw subscriptions of N217.87 billion against a M200 billion offer, with N63.99 billion allotted at 16.15 per cent.
- The May 2033 bond recorded the strongest demand, drawing N462.21 billion in subscriptions compared to a N300 billion offer. A total of N332.7 billion was allotted at a stop rate of 16.64 per cent, underscoring investors' appetite for longer-tenor securities.
International Market and Eurobonds
In the international market, Nigeria's sovereign Eurobonds posted modest gains, supported by improved demand across the yield curve. Average yields declined by two basis points to 7.45 per cent, signalling a gradual recovery in investor confidence in the country's dollar-denominated debt instruments.
Future Outlook for Fixed-Income Market
Looking ahead, analysts expect the fixed-income market to remain cautious in the near term, as investors continue to weigh inflation trends, interest rate expectations, and liquidity conditions. While domestic bond demand may stay relatively muted, yields could experience mild volatility, particularly at the longer end of the curve, if capital inflows remain constrained.
