Naira Crashes to N1,380/$ at NAFEX Market

The Nigerian Naira NAFEX exchange rate took another hit on Monday, April 27, falling to N1,380.71 per dollar, a 1.2 per cent single-session slide that dragged the currency to its weakest point in 17 days. Foreign portfolio investors are staying short on Nigerian assets, and traders are rotating into safer currencies, and not even surging oil revenues tied to the Middle East crisis have been enough to stop the rot.

Naira Drops to 17-Day Low at the Official NAFEX Window

The Naira shed N16.47 against the dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEX), closing Monday's session at N1,380.71/$1 from the previous day's N1,364.24/$1. That is a 1.2 per cent move in a single day, sharp enough to raise eyebrows among FX desks watching Nigeria's managed float.

The damage was not confined to the dollar pair. Against the British Pound Sterling, the Naira lost N16.04, finishing at N1,863.76/£1 compared with N1,847.72/£1 from the prior close. The Euro told the same story: a N12.72 slip to N1,615.01/€1 from N1,602.29/€1. Three pairs, three losing sessions, the pattern was consistent.

The continued pressure on the Naira comes as foreign portfolio investors increasingly opt to stay short on Nigerian market positions rather than committing fresh capital. Global disruptions, including uncertainty around US monetary policy and Middle East shipping risks, are keeping flows cautious. The oil windfall the market expected to buoy the Naira has, for now, failed to translate into meaningful FX inflows at the official window.

Why Is the Naira Falling Despite an Oil Price Surge?

Portfolio investors are choosing exits over allocations

Here is the part that deserves more scrutiny. Oil prices climbed sharply on Middle East tensions, Brent futures pushed above $111 a barrel on Tuesday, yet the Naira kept losing ground. The explanation, according to analysts watching the market, is that the supply overhang on the sell-side of the FX market has cleared. Sellers who were rattled by macro shifts or fears around global financial stability have already exited. What remains is a thinner market, and thinner markets move fast.

Foreign portfolio investors staying short means they are not bringing dollar liquidity in. Whatever oil revenue is flowing through the Nigerian government's coffers is not reaching the retail or interbank FX market fast enough to offset the demand pressure. That is a structural problem, not a temporary blip.

Two major central bank decisions are also hanging over markets this week. The US Federal Reserve was set to announce its rate decision on Wednesday, and the European Central Bank was scheduled to follow on Thursday. Rate uncertainty keeps global capital cautious, and Nigeria, with its chronic FX volatility, tends to feel that caution more sharply than most.

Black Market and Bank Counter Rates Widen the Gap

Outside the official market, things looked no better. The Naira black market rate depreciated by N5 on Monday to N1,390/$1, moving away from the previous N1,385/$1 quote. The spread between the official NAFEX rate and the parallel market has narrowed considerably since Nigeria's FX reforms began in mid-2023, but days like Monday remind traders that the gap has not closed completely.

At the GTBank forex counter, the situation was even starker. The Naira crashed by N9 to settle at N1,379/$1, down from N1,370/$1 in the preceding session. Bank counters typically reflect tighter spreads than the black market, but a N9 single-day move at a major commercial bank's window is a signal that demand for dollars at the retail level remains firmly elevated.

Interbank FX turnover, meanwhile, actually improved. Daily data showed turnover rising to $98.829 million across 78 deals, up from $76.65 million in the previous session. Higher turnover without a stronger Naira suggests the demand side is absorbing every dollar that comes in, not a recipe for stabilisation in the near term.

Crypto Markets Stay Cautious as Bitcoin Holds at $77,216

The cryptocurrency market mirrored the broader caution in global financial markets. Bitcoin (BTC) was trading at $77,216.66, holding its position despite the dual pressure of surging oil prices and mounting geopolitical tension around a potential extended US naval blockade of the Strait of Hormuz. BTC refusing to break down is the kind of price action bulls point to as evidence of a reinforced floor, though it equally reflects a market unsure where to run.

Several altcoins managed modest gains on the session:

• Ethereum (ETH) up 1.5% to $2,324.59
• Dogecoin (DOGE) up 1.4% to $0.1016
• Solana (SOL) up 0.6% to $84.85
• Cardano (ADA) up 0.5% to $0.2483
• Binance Coin (BNB) up 0.2% to $627.15
• TRON (TRX) down 0.6% to $0.3224
• Ripple (XRP) down 0.03% to $1.39
• USDT and USDC held steady at $1.00 each