Exchange Rates Gap Crashes as NFEM Rate Closed at N1601/$
The naira exchange rate gap collapsed as the local currency closed at N1601.82 per US dollar in the Nigerian Foreign Exchange Market (NFEM) on the back of sustained Central Bank support. The Apex Bank keeps selling US dollars to banks to keep liquidity strong and volatility in check-—to achieve a stable exchange rate.
CBN FX spot data obtained showed that the naira appreciated by 0.03% in the official window, closing at N1,601.82 per dollar. Similarly, the naira ended the day at N1,605 per dollar in the parallel market on the back of reduced demand pressure.
At the current exchange rates in the official and parallel markets, the exchange rate gap has narrowed significantly due to sustained FX sales to banks and Bureau de change (BDCs)
The interbank NFEM has remained steady this week in the absence of shock, buoyed by ample liquidity and reduced market volatility, with the dollar-naira pair trading between N1,599.99 and N1,607.00.
Analysts at AIICO Capital Limited hint that the naira will likely maintain its current trading band, with the CBN’s continued market interventions providing support.
Analysts maintained that the authority’s FX intervention has drained foreign reserves to a 3-year low of $37.83 billion on Wednesday after successive sales of dollars to banks.
FX inflows into external reserves came under pressure as oil prices and production volume fluctuated, with the CBN’s latest data showing more than a 31% drop in federally collected revenue in January 2025.
Oil prices were mostly flat on Thursday as investors digested the possibility of an OPEC+ supply boost, mixed economic signals, and uncertainty around U.S. tariffs and the Russia-Ukraine conflict.
Brent crude inched up by 10 cents, or 0.2%, to $66.22 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 16 cents, or 0.3%, to $62.43. Meanwhile, gold rebounded after a sharp drop the previous day, supported by a weaker dollar and bargain hunting.
Spot gold climbed 1.4% to $3,333.90 an ounce, recovering some ground after Wednesday’s decline. The precious metal had surged to a record $3,500.05 on Tuesday amid economic concerns but eased after President Trump softened his tone on both the Fed and China. Outlook:
The potential for reduced tariffs continues to inject instability into oil markets, with price fluctuations likely to persist until clearer policy signals emerge. #Exchange Rates Gap Crashes as NFEM Rate Closed at N1601/$ Nigeria’s US Dollar Bond Yield Dips by 46bps
