Naira Climbs as CBN Sells More U.S Dollars to Banks
The naira exchange rate gained across the foreign exchange markets as a surplus FX position keeps demand pressures in check. According to data from the FMDQ platform, the naira spot rate appreciated by 0.18%, closing at N1,541.38 per US dollar in the official market.
The Central Bank of Nigeria (CBN) has been supporting the naira by selling US dollars to authorised dealer banks. The Apex Bank has become a bit aggressive in its FX intervention in December as part of an effort to keep the local currency stabilised.
Yesterday, the CBN intervened yet again, selling $54.60 million between the rates of ₦1,531.00/$1 and ₦1,547.00/$1, bringing the total FX sales for the week to $151.7 million. TrustBanc Financial Group said in a report.
Last week, the CBN conducted FX intervention three times, selling about $125 million to authorised dealer banks to boost FX liquidity in the official FX market and keep the exchange rate stabilised, aiming at boosting the authority year-end performance scorecard.
Fitch Ratings predicted the naira will close the year at N1,450, which appears to be achievable based on the latest exchange rate trend in contrast to N1,200 predicted by Goldman Sachs and other naira bulls. FX traders at AIICO Capital Limited said in an update the Nigerian autonomous foreign exchange market (NAFEM) experienced a degree of stability, with enhanced liquidity noted.
The firm said trades were conducted at the NAFEM window from N1,531.00 to N1,550 amidst growing gross external reserves. Despite oil price fluctuation in the global commodities market, the gross external reserves rose to $40.761 billion this week.
Oil prices experienced a slight increase in the global commodities market, buoyed by a decrease in U.S. crude inventories. However, gains were capped as the U.S. Federal Reserve indicated a slowdown in interest rate cuts for 2025, which might constrain economic growth, lower fuel demand, and bolster the dollar.
Brent crude was priced at about $73.67 per barrel, while WTI was around $71.09. Meanwhile, gold prices remained stable, with earlier gains wiped out as U.S. data hinted at the Fed’s cautious policy stance ahead, trading near $2,589.43 per ounce. Improved Tax-to-GDP Ratio will Actualise Budget Ambitions – LCCI
