Naira Climbs as Interbank FX Turnover Declines by 80%
The naira climbed against the US dollar at the Nigerian Foreign Exchange Market (NFEM) on Thursday, the third straight rally since the beginning of the week.
The local unit gained 0.40% at the NFEM window, closing at ₦1,347.53/$, down from ₦1,352.87/$, according to data released by the Central Bank of Nigeria (CBN).
The spot FX rate hovered between ₦ 1,343.5000 and ₦ 1,363.5000 per dollar during the intraday trading session, signalling that demand pressure continues to ease since CBN intervention.
Financial institutions’ forex trading activity in the interbank market declined sharply, with data showing US dollar volume turnover and deal count edged lower.
Interbank turnover moderated by about 80% to $54.051 million, from $244.068 million reported by the CBN on Wednesday.
The number of deals in the interbank market also fell to 74 from 151 the previous day.
In the parallel market, the naira weakened 0.36% to ₦1,390/$ from ₦1,385/$, so the gap between the two markets widened to 3.15% from 2.37%.
At the NFEM, the British pound fell 0.69% to ₦1,790.86, and the euro fell 0.55% to ₦1,500.34. In the parallel market, the pound rose 0.83%, and the euro rose 0.33%.
Nigeria’s foreign reserves fell for the first time in two months following CBN’s latest FX intervention at the official window early this week. The renewed forex intervention followed a worsening local currency exchange rate, which closed at N1367 per dollar.
Gross external reserves fell to $55.257 billion from $55.264 billion, breaking the uptrend seen recently. The CBN sold $500 million to banks during the week. U.S. Dollar Index Slips Ahead of Key Economic Data
