Naira Keeps Euro Below N1,580 as CBN Reforms Steady Forex Market

The Nigerian naira remained supported against the European currency last week, with the latest data from the CBN showing it last settled at N1576/€1, compared to N1573/€1 in the prior week.

The Nigerian naira remained supported against the European currency last week, with the latest data from the CBN showing it last settled at N1576/€1, compared to N1573/€1 in the prior week.

The rate was near N1,774/€1 in January 2026 and has pulled back to the multi-month low of N1,555 /€1.

The EUR/NGN has traded in an exceptionally tight setup since the opening days of July (N1561/€1 to N1576.7/€1).

The high level of CBN intervention and liquidity injection into forex markets has minimized sharp volatility at official rates.

The Central Bank of Nigeria (CBN) recently announced and implemented some structural, regulatory and monetary policy changes to reduce volatility, increase market liquidity and elevate the naira’s stability.

The upfront payment for imports of physical goods was increased from 15% to 30% of FOB, simplifying purchasing procedures and easing working capital demands for businesses.

The self-funded domiciliary account holders no longer need to fill out “Form A,” where the balance amount for self-funders can now be domiciled into its destination directly without complex procedures.

Increased Personal / Educational Allowances of $25,000 per semester were implemented for international school fees. PTA/BTA is now paid 25% in physical FX cash and 75% in electronic form.

Consequently, expectations of monetary easing from the ECB restricted broad-based global Euro strength, and the latter continued to underperform EM currencies with their high domestic yield. Even with Nigeria’s structurally high inflation, high rates have been effective in producing the short-term stability seen in spot markets.

The Euro maintains the $1.6 levels against the American dollar

The Euro begins the new week on a quiet note and traded below $1.1600 against the US dollar during the early European day on Monday. This was quite close to a new high set on June 17 in response to the weaker-than-anticipated US employment figures on Friday.

The widely expected US Nonfarm Payrolls (NFP) report indicated that nonfarm payrolls contracted by 23K jobs in July, sharply missing the consensus expectation of 80K jobs. Coupled with a revised July figure of20K jobs (down from 57K originally reported), annual wage inflation eased from 3.4% to 3.2% in the same period on an Average Hourly Earnings basis.

This fact, together with the unemployment rate falling from 4.2% to 4.1%, erodes the arguments for US Federal Reserve (Fed) interest rate hikes, making USD look negative.

The immediate impact on markets, however, appears short-lived due to persistent concerns for de-blocking operations in the Strait of Hormuz, which provides safe havens like the USD with much-needed support.

• The US Dollar index price action aims to follow through Friday’s closing attempt amid late-session gains against six majors since June 17 and comes to the fore among risk factors, posing a headwind for the EUR/USD rate.

Currency traders appear hesitant to take directional exposure, anticipating further outcomes related to tension in the Middle East.

• Over the weekend, Iran mentioned its talks with Oman were near an agreement to create a safe shipping route through the waterway.
• However, Iran warned an agreement would not lead to the instant reopening. The Iran-backed Houthi group in Yemen said separately that a recent missile strike targeted Saudi Arabia’s Jazan refinery and a tanker flagged from the UAE’s Abu Dhabi National Oil Company has been hit in the Strait of Hormuz.
• That keeps a global risk premium in prices, which continues to weigh down risk assets, inflates oil prices, and helps push inflation bets and speculation that a July rate hike is a foregone conclusion in 2023 and at least one hiking cycle is to come in 2026.

The crosscurrent of fundamental backdrops in turn supports a more cautious approach ahead of further extension for the EUR/USD price action.

Investors are now awaiting a pair of US CPI data this week for further directional impetus regarding the FED policy, and the oil risk premium should influence the US dollar price action as we look for further short-term opportunity in the euro-Dollar space.