Amid Hostilities In Middle East, Naira Weakens To N1,378/$

Amid escalating hostilities in the Middle East, the Nigerian currency, the naira, has continued to shed value, closing weaker on the first trading day of the week at N1,378.02 to the dollar.

The local currency closed last week weaker at N1,363.39, compared with N1,349.23 at which it traded at the beginning of last week.

The naira ended February 2026 at N1,368 to the dollar in the official market, up from N1,384.5 at the start of the month, reflecting a modest month-on-month appreciation.

At the parallel market, the naira remained stable, selling at N1,380 to the dollar, the same as it sold last week on Friday. This brings the difference between the official and parallel taker rates to less than N2, effectively converging the rates.

The naira had been appreciating in the course of the year, opening January 2026 at N1,431 and closing at N1,391 in the first month of the year.

Meanwhile, Gross external reserves rose to approximately $50 billion at the end of February, up from $46.59 billion at the start of the month.

Escalating regional hostilities have rattled oil prices, indirectly weakening the naira despite earlier 2026 gains from policy interventions.

The Central Bank of Nigeria (CBN) efforts, including $200 million injections, have curbed sharper falls but failed to fully offset importer and corporate demand. Structural issues like oil dependency and low tax-to-GDP ratios amplify vulnerability, even as reserves provide a buffer.

From January’s open at N1,431 to a February close of N1,368, the naira showed year-to-date appreciation before this week’s slip to N1,378.02 from N1,363.39.

Week-on-week, it weakened to N1,349.23, signalling renewed volatility following the CBN’s February rate cut to 26.5% MPR.

Reserves climbed to $50 billion by February’s end, up from $46.59 billion, offering about 10 months of import cover.

Stability at N1,380 mirrors official trends, narrowing the gap to under N2 for near convergence.

This alignment reduces arbitrage but underscores unified demand pressures amid geopolitical risks.