Nigeria: Naira Holds Steady As Bonny Light Hits $115 and Reserves Reach $55bn

What the report says

Nigeria’s currency began November on relatively stable footing, according to a Leadership report distributed by AllAfrica, as higher crude prices, stronger oil production and rising foreign reserves supported the naira. The story said Bonny Light, Nigeria’s benchmark crude, was trading at about $115 a barrel, helping boost foreign-currency earnings and giving the Central Bank of Nigeria more room to manage demand in the FX market.

The report said domestic crude output had climbed above 1.53 million barrels per day, or roughly 1.7 million barrels per day including condensates, which it described as a four-year high and above Nigeria’s OPEC quota. It linked the improvement to better security in the Niger Delta and less pipeline vandalism. Gross reserves were put at about $55 billion, while net reserves were said to have reached a record $46 billion.

Leadership also said the central bank has been tightening liquidity through open market operations, helping keep naira assets attractive to foreign investors. It noted that local refining, including activity at the Dangote refinery, is reducing the need for imported petrol and easing pressure on dollar demand. The article said the naira has recently traded in a fairly narrow range, with the official and parallel markets still close enough to suggest manageable gaps.

The report warned, however, that the outlook remains tied to continued oil strength and steady output. It said a fall in global demand, renewed disruptions in the Niger Delta or weaker prices could quickly reverse the gains, while Nigeria’s production still remains below the level assumed in the budget.