The Nigerian naira is edging closer to breaching a key resistance level of N1,500 per US dollar in the official market, trading at N1,528/$ on Friday—slightly weaker than Thursday’s close.
This shift comes as fundamentals around the naira have improved, partly due to the return of international spending capabilities on Naira-denominated debit cards. Leading banks including Guaranty Trust Bank (GTBank), United Bank for Africa (UBA), Wema Bank, and Stanbic IBTC have reintroduced foreign currency transactions using local currency cards.
GTBank informed customers that they can now spend up to $1,000 every three months internationally using their naira Mastercard. Of this amount, ATM withdrawals abroad are capped at $500, while the full $1,000 limit applies to combined online and point-of-sale transactions outside Nigeria. The bank reiterated that all international transactions—whether cash withdrawals, online shopping, or in-store card use—fall under this quarterly cap.
UBA also confirmed the full reinstatement of global access for its Premium Naira Cards, including the Gold, Platinum, and World variants. The bank described the move as part of its commitment to improving customer experience in an increasingly digital world.
The naira's relative stability this week also reflects support from international institutions. In its latest Article IV Consultation Report for 2025, the International Monetary Fund (IMF) endorsed the Central Bank of Nigeria’s (CBN) tight monetary policy stance as both “appropriate and necessary” for controlling inflation and maintaining economic stability. The IMF praised the CBN's decision to end the monetisation of deficits, a practice previously linked to rising inflation, and acknowledged reforms aimed at enhancing monetary transparency and governance.
In its May meeting, the CBN kept the Monetary Policy Rate (MPR) steady at 27.5%, along with the Cash Reserve Ratio (CRR) at 50% for commercial banks and 16% for merchant banks.
Dollar Weakens Globally Despite Strong U.S. Jobs Report
Meanwhile, the US dollar edged lower on global markets Friday, after gains made earlier in the week. The Dollar Index—which tracks the greenback against a basket of six major currencies—fell by 0.2% to 96.605, reflecting modest weekly losses despite Thursday's 0.4% jump.
Stronger-than-expected US employment data had earlier boosted the dollar by pushing back expectations of a Federal Reserve rate cut. However, escalating global trade tensions—fueled by new tariffs set to take effect July 9 and threats from the White House to formally notify several countries of the tariffs they face—quickly reversed those gains.
US President Donald Trump’s recent announcement marks a shift from earlier promises to negotiate individual trade deals. The uncertainty has added to market volatility, especially as Fed Chairman Jerome Powell and President Trump continue to clash on monetary policy.
Speaking at the European Central Bank’s (ECB) forum in Sintra, Portugal, Powell suggested that rate cuts may be possible in the coming months due to rising inflation forecasts and tariff impacts. He reiterated that his priority is ensuring economic stability for his successor.
In contrast, the euro strengthened slightly, with EUR/USD rising by 0.1% to 1.1774 and expected to close the week 0.5% higher. However, weak industrial data from Germany—showing a 1.4% drop in factory orders in May—added concerns about the eurozone economy.
Despite cutting interest rates for the eighth time this year in June, ECB policymakers signalled a pause in further rate reductions at their upcoming meeting.
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