Naira Rebounds as Interbank FX Turnover Climbs by 20%
The naira rose against the US dollar at the Nigeria foreign exchange market (NFEM) window on Tuesday due to improved liquidity. International payments were adequately met by US dollar volume in the currency market, boosting the official spot FX rate.
According to data released by the Apex Bank, the naira closed at N1379.6842 per dollar from N1383.6262 the previous day. FX Transactions in the official markets were conducted between N1370 and N1384 per dollar, the best rates seen in the last 5 days.
Updated daily FX data revealed improved liquidity in the forex market, boosting the naira’s position against Western currencies.
Interbank FX turnover surged by 20% to $269.898 million from $223.938 million as financial institutions continue to act as intermediaries for corporate clients. However, interbank FX deals declined to 166 from 177 reported on Monday.
Naira was under pressure last week due to increased demand for hard currency. The CBN has reduced its FX intervention to support the naira and has not injected dollars into the official window in about two months.
Nigeria’s gross external reserves increased to $51.429 billion due to sustained FX inflows from across key sources, including hydrocarbon receipts.
Oil prices moved higher during Tuesday’s trading session, but the overall market picture remains mixed. Brent crude and US West Texas Intermediate (WTI) crude futures are still heading for their biggest quarterly losses since the COVID-19 pandemic despite the day’s gains.
Investors are watching several developments that could influence the market, including possible diplomatic discussions between the United States and Iran, shipping activity through the Strait of Hormuz, and changing global supply expectations.
Analysts are also reviewing updated price forecasts after concerns about supply disruptions eased. These factors will play an important role in determining whether crude oil prices continue to recover or face renewed pressure.
Naira Falls as Foreign Investors’ Equity Selloffs Intensify FX Demand
