Naira Strengthens to N1,360 as Forex Market Turnover Explodes
The Nigerian naira strengthened against Western currencies, including the US dollar, at the foreign exchange market on Wednesday despite an increase in international payments.
The local unit rebounded from N1364.8992 per greenback at the official window to N1360.5292, suggesting forex market supply was able to accommodate rising FX demand.
According to official data obtained from the authority, transactions consummated at the Nigerian Foreign Exchange Market (NFEM) during the day were executed between N1359.5500 and N1362 per dollar.
This suggests improved liquidity at the NFEM Window, with the spot rate rebounding from intraday rates of N1361 and N1365.5000 the previous day.
Activities of banks and other market makers at the NFEM interbank FX window increased sharply after a significant downturn was experienced the previous day.
Specifically, data from the CBN indicated that interbank FX turnover rose sharply to $168.758 million due to an increase in banks’ activities as intermediaries for their customers.
The total US dollar turnover surge translates to a daily increase of 481% from $29.060 million reported on Tuesday. The CBN report indicated that the number of deals at the interbank FX market surged to 190 from 47 the previous day,
Oil prices rose on Wednesday as deadly attacks on vessels in the Red Sea and Gulf of Oman heightened concerns over the security of major global shipping routes.
Brent crude futures, the international benchmark, gained about 0.88% to $89.69 per barrel while US West Texas Intermediate (WTI) crude futures advanced 0.91% to $83.96 per barrel.
The gains came after Iran-backed Houthi rebels killed six people in an attack on a cargo ship in the Bab el-Mandeb Strait on Tuesday, marking the first reported fatalities from attacks on Red Sea shipping in more than a year.
Hours later, US forces said they fired missiles at a container ship that allegedly attempted to breach Washington’s blockade of Iranian ports in the Gulf of Oman.
The incidents have underscored the growing impact of the nearly six-month-old conflict on two strategically important global shipping routes, raising concerns over potential disruptions to energy supplies and international trade.
The developments come even as diplomatic efforts aimed at reopening the Strait of Hormuz appear to be making progress.
Pakistan has expressed optimism that Washington and Tehran could reach an agreement over the reopening of the strategic waterway. Investors Warned: Read Between Bessent’s Three Moves This Week
