Naira Gains as Rising External Reserves Fuel Market Confidence
The naira rate improved in the Nigerian foreign exchange market as rising external reserves continue to fuelling confidence that era of sustained shortage may be over.
A slew of analysts expressed view that the Apex Bank will maintain stance to defend the naira till the year close. The consistent increase in external reserves has also boosted market confidence in the absence of capital restrictions.
The local currency market has continue to see both upswing and depreciation that align with daily FX demand versus the dollar volume available at the supply side.
However, a new trend suggests that the naira will continued to trade within range seen in the third quarter, while analysts’ predictions suggest possibility of exchange rate appreciation in the fourth quarter.
With the increase oil production, Nigeria’s FX receipt from hydrocarbon sales has continued to rise, though significant chunk has been mortgage in oil for loans deal signed by NNPC.
Latest data update from the Central Bank of Nigeria (CBN) showed the naira edged up against the dollar, with a 0.08% appreciation to ₦1,487.37 per US dollar, reflecting increased demand for the Naira.
The naira hit intraday high of N1,495 per dollar at the official window, and some transactions were consummated at the lowest rate of N1482.33. Similarly, the naira appreciated by 0.08% at the parallel market to close at an average of ₦1,516.
Nigeria’s gross external reserves balance increased to $42.032 billion on Monday, from $42.036 billion as additional inflows from across sources boosted the nation’s external buffer. #Naira Gains as Rising External Reserves Fuel Market Confidence#
