Naira Rises Sharply as CBN, FPIs Boost FX Liquidity
The naira saw a significant daily surge against the US dollar in the official market on account of strong FX liquidity bolstered by the Central Bank and foreign portfolio investors, or FPIs.
According to spot data obtained from the forex market, the naira appreciated by 72 basis points in the official window, closing at N1,522.68 per US dollar. This followed sustained FX intervention by the CBN and the latest inflows from offshore investors into the financial markets.
The exchange rate also appreciated by N20 to settle ₦1,620 per dollar in the parallel market following the decision to waive the annual licence renewal fee for Bureau de Change operators.
In a commentary note, AIICO Capital Limited expects naira to trade within a similar range, noting that most transactions in the FX market were consummated between N1,502.85 and N1,548 per dollar on Tuesday.
In a report, Coronation Research said inflows into the Nigerian autonomous foreign exchange market increased to US$769.4 million, up by 18.13% from US$651.30 million in the previous week.
Analysts said the CBN accounted for 34.56% of the total inflow amidst sustained FX intervention that has started to crack Nigeria’s foreign reserves, now below $40 billion. Other contributors to total FX inflows in the market were FPIs (30.07%), non-bank corporates (21.51%), exporters (13.38%), while other sources accounted for 0.48%.
Elsewhere, oil prices increased slightly, recovering from several weeks of declines, as disruptions in Libyan oil loadings at major ports counterbalanced concerns regarding diminished demand linked to weak economic indicators from China and rising temperatures in other regions.
Brent crude was trading at approximately $77.20 per barrel, while West Texas Intermediate (WTI) was priced at around $73.25. In a similar trend, gold prices rebounded after a decline in the previous session, which was prompted by a technology-driven sell-off in the broader market.
The growing uncertainties surrounding U.S. President Donald Trump’s proposed tariffs continued to attract investor interest in this safe-haven asset, with gold trading at approximately $2,751.66 per ounce. #Naira Rises Sharply as CBN, FPIs Boost FX Liquidity Nigerian Exchange Rises by N795bn as Banking, Consumer Stock Rally
