Naira Rally Expected as Dollar Hits N1,390 in Market

Experts forecast a continued rally for the naira as the dollar hits N1,390 in the parallel market, influenced by stronger oil prices and increased foreign exchange inflows. The Brent crude oil price has surged above $105 per barrel, exceeding Nigeria's 2026 budget benchmark of $64.85, which is expected to enhance fiscal revenue and foreign exchange reserves.

Analysts indicate that geopolitical tensions, particularly involving the United States and Iran, could further elevate oil prices, potentially reaching $150 per barrel. The naira has recently strengthened, trading around N1,385 in the official market, with the Central Bank of Nigeria reporting rates of N1,396.99 and N1,400.48.

Central Bank Governor Olayemi Cardoso is implementing reforms to restore transparency and attract foreign investment, including the liberalization of exchange rates and addressing the FX backlog. Nigeria's foreign exchange reserves stood at approximately $48.44 billion in late April, with a target of $51 billion by year-end, providing a buffer against external shocks.