Naira Depreciates Despite Oiler Inflows, FX Intervention
The naira fell at the Nigerian foreign exchange market despite inflows from international oil companies (IOCs), FX intervention by the Central Bank, and rising external reserves.
The local currency closed the week at N1535.03 per dollar, according to updated FX by the CBN, lost N2.52. The FX market traded with mixed momentum through the week as demand and supply dynamics shaped flows.
Early sessions opened with weak demand, pushing the Naira to lows of $/N1529.00, before fresh buying interest lifted offers to the $/N1535.00 range, investment firm AIICO Capital Limited said.
By midweek, bids consistently outweighed offers, with demand pressure driving trades as high as $/N1538.50 in decent volumes.
Analysts at AIICO Capital Limited said the absence of the CBN during this period constrained liquidity, though later interventions of about $50 million alongside inflows from an oiler helped ease pressure and narrow spreads.
By weekβs close, trades stabilized within $/N1534.50β1536.00, with the Naira depreciating 16bps week on week to $/N1535.04.
The local currency exchange rate stability has been supported by the nationβs growing external reserves. Data from the CBN showed that gross external reserves rose by $242 million to $41.07 billion.
Oil prices held steady on Friday as uncertainty lingered over a possible Russia-Ukraine peace agreement, though both benchmarks posted their first weekly gains in three weeks.
Brent crude edged up 6 cents to $67.73 per barrel, while U.S. West Texas Intermediate added 14 cents to $63.66. On the week, Brent rose 2.9% and WTI gained 1.4%.
Meanwhile, gold prices rebounded, lifted by growing expectations of a September rate cut after comments from Federal Reserve Chair Jerome Powell at Jackson Hole.
Spot gold climbed 1.1% to $3,373.89 per ounce, with U.S. futures also up 1.1% at $3,418.50. Outlook: Oil prices will likely remain under pressure next week as ceasefire uncertainty persists and negotiations progress slower than markets anticipated. #Naira Depreciates Despite Oiler Inflows, FX Intervention#
