Naira holds steady at N1,370 despite drop in dollar trading volume

The Nigerian naira opened the week stable at the official foreign exchange market, holding near N1,370 per US dollar even as total dollar trading volume fell sharply. Timely intervention by the Central Bank of Nigeria (CBN) helped limit volatility and supported the local currency despite reduced activity.

Data from the Nigerian Foreign Exchange Market (NFEM) showed the naira closed Friday, July 3, 2026, at N1,370.1904 per US dollar, compared with N1,370.1516 recorded in the previous trading session. Although the local currency posted a marginal decline, it remained largely stable, with the spot exchange rate fluctuating within a narrow band of N1,369 to N1,373 per dollar throughout the day.

Dollar trading volume drops sharply

Despite the naira's resilience, activity at the official market softened. The total value of foreign exchange traded at the official window declined by approximately 18%, falling to $70.43 million across 82 interbank transactions, compared to $85.52 million recorded a day earlier.

The decline came after three consecutive trading sessions of tighter liquidity, which prompted the CBN to step into the market with measured dollar sales aimed at improving conditions. Market analysts attributed the steady performance to reduced demand for foreign exchange, particularly for international payments, which helped limit volatility.

CBN intervention steadies the ship

According to investment firm Herwood Capital Limited, the central bank's intervention quickly improved market conditions. The firm noted that liquidity strengthened shortly after trading opened, following modest dollar sales by the CBN, allowing dealers to execute transactions more efficiently and helping the naira recover from early pressure.

Before the intervention, the local currency had briefly weakened beyond N1,390 per dollar in early trading as demand temporarily exceeded available supply, despite inflows from foreign portfolio investors (FPIs). The CBN's daily foreign exchange report showed that the naira ultimately closed the week stronger than it began, appreciating from N1,380.9329 per dollar at the start of the week to N1,370.1904, reflecting improving market confidence.

Oil prices edge up but gains limited

Meanwhile, global oil prices recorded modest gains on Friday as investors cautiously welcomed ongoing diplomatic efforts between the United States and Iran, reducing concerns over potential supply disruptions in the Middle East. Brent crude rose 0.6% to about $72.30 per barrel, while U.S. West Texas Intermediate (WTI) advanced 0.5% to around $69 per barrel.

However, analysts noted that increased crude exports from Gulf producers limited further gains ahead of the U.S. Independence Day holiday. Despite Friday's increase, both oil benchmarks ended the week largely unchanged, suggesting that geopolitical tensions have eased significantly compared to recent weeks.

The relative stability in both the foreign exchange and oil markets is expected to provide short-term support for Nigeria's economy, although analysts say sustained liquidity and stronger foreign exchange inflows will remain crucial to keeping the naira on a stable path.