Naira Rises 116 Pips Against Dollar on FX Liquidity Boost
Naira exchange rates strengthened 116 pips, or 1.16% week-on-week, against the US dollar in the official forex market after the Central Bank of Nigeria (CBN) intervened.
The Apex Bank stepped in by selling $500 million to authorised dealers at the official window after a sharp naira depreciation that weakened the spot rate to N1,367.
With the liquidity boost, the local unit closed Oct at N1,346.2565 per US dollar, gaining 116 pips at the official window in a week, according to data obtained from the CBN.
The local unit opened the month at N1329.16 per dollar but closed weaker due to a US dollar liquidity shortfall, which Apex Bank eventually bridged.
During the week, the naira recorded a mixed performance against the U.S. dollar across the official and parallel foreign exchange markets. The local currency depreciated 0.47% week-on-week in the parallel market, settling at N1,369.
The nation’s foreign reserves rose marginally by 0.14% to $55.26 billion, indicating a slight improvement in the country’s external liquidity position.
FX analysts told MarketForces Africa that the exchange rate fluctuation aligned with a broader economic shift as the market anticipates continued monetary easing while Nigeria maintains a disinflationary posture.
Elevated oil prices keep Brent at an 8-month high, reflecting a strong supply shock in the global commodity market. While energy costs have increased, the development is fiscally positive for the Nigerian government.
Crude oil prices surged last week, extending their monthly rally over escalating tensions in the Middle East and Houthi attacks on Saudi infrastructure.
Brent crude and West Texas Intermediate (WTI) traded at $116.56 and $103.35 per barrel, respectively, ahead of the November 3 U.S. midterm elections. In contrast, Nigeria’s Bonny Light crude declined by 8.19% to $119.23 per barrel.
The local unit is expected to remain mixed across foreign exchange markets in the near term, supported by marginal improvements in external reserves and potential foreign exchange inflows.
The pound dipped to ₦1,803.24 at NFEM, and the euro weakened to ₦1,508.59. In the parallel market, the pound and euro were unchanged. NGX All Share Index Rises, FirstHoldco Drives Trading Volume
