Naira Exchange Rate Appreciates as CBN Sells Dollar
The naira exchange rate appreciated to N1,514 at the official foreign currency market, supported by strong US dollar supply, supported by latest round of FX intervention. Data from the Central Bank of Nigeria (CBN) revealed that spot rate closed at N1514.8671 on Thursday, from N1521.4569 the previous day.
The naira strengthened in the absence of significant US dollar demand pressures, reflecting the latest FX intervention boost by the authority. The CBN auctioned $15 million to authorised dealer banks to damp FX demand pressure amidst growing external reserves.
Updated data from the CBN showed that the nation’s gross FX reserves increased for the ninth consecutive week, growing by USD216.34 million week on week to USD41.46 billion, its highest level since November 2021.
Analysts noted the currency market experienced dollar inflows from foreign portfolio investors that participated in the CBN OMO auction during the week in addition to dollar supplied from exporters and non-bank corporate.
In a note, Cowry Asset Limited projected that the naira will face renewed pressure as dollar demand typically rises toward the end of Q3, in line with import settlements and corporate obligations.
Overall, analysts project the naira to trade within a fragile stability band, with the risk skewed toward mild depreciation unless oil prices rebound decisively or FX supply improves significantly.
A similar trend played out in the parallel market, where the naira strengthened by 0.46% to close at an average of N1,538/$1, relative to N1,545/$1 in the prior period. The slight convergence between official and parallel rates reflects improved market liquidity at the margin, supported by steady remittance inflows and cautious dollar demand.
However, the sustainability of this stability remains uncertain, given Nigeria’s fragile external sector dynamics and the volatility in oil markets, which remain the country’s primary source of FX supply. #Naira Exchange Rate Appreciates as CBN Sells Dollar How Major Currencies Trade in Forex Markets
