Naira stability Iran conflict impact remains limited as oil gains and Dangote Refinery output support Nigeria’s currency amid global market pressure
Nigeria’s currency has continued to show resilience despite rising global uncertainty linked to the Iran conflict, with improved oil earnings and increased domestic refining capacity providing a strong buffer, according to a report released by Mauritius-based MCB Group.
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The report indicated that the naira is expected to remain broadly stable in the near term, trading below the N1,350 per dollar threshold, supported by stronger foreign exchange inflows and reduced demand for imported fuel.
The Naira stability Iran conflict impact assessment highlights how geopolitical tensions in the Middle East have driven volatility across global markets, pushing up oil prices and strengthening the US dollar.
However, Nigeria has so far avoided severe currency pressure due to structural improvements in its energy sector.
A major factor behind this stability is the full operational scale of the Dangote Refinery, which now processes around 650,000 barrels of crude per day.
The refinery has significantly reduced Nigeria’s reliance on imported fuel, easing pressure on foreign exchange demand.
The shift has also positioned Nigeria as an emerging exporter of refined petroleum products, with growing regional demand boosting foreign currency inflows.
Analysts say this development is helping to reinforce external reserves at a time of global uncertainty.
MCB Group noted that higher global oil prices triggered by the Iran conflict could further strengthen Nigeria’s fiscal and external position, potentially making the country one of the indirect beneficiaries of the ongoing geopolitical tensions.
The report also pointed to Nigeria’s macroeconomic reforms, including exchange rate liberalisation, fuel subsidy removal and tighter monetary policy, as key drivers behind the naira’s recent performance.
The currency recorded an eight per cent gain in 2025, marking its first annual appreciation in over a decade.
However, the outlook is not without risks. External reserves have experienced mild pressure due to central bank interventions aimed at stabilising the currency, while inflationary concerns remain elevated amid rising fuel and global commodity prices.
The Central Bank of Nigeria is expected to maintain a cautious policy stance, with potential delays in interest rate cuts as it seeks to balance inflation control with economic growth.
Also read: Dangote Refinery Exports Massive Petrol Surplus
Despite these challenges, the report concluded that Nigeria’s near-term currency outlook remains relatively stable, supported by improved savings, stronger export earnings and ongoing structural reforms.
