Naira Appreciates Against Dollar to N1455, FX Reserves Rise
The Nigerian naira appreciated to N1455 at the official foreign exchange market on Thursday, reflecting strong FX liquidity position in the currency market.
The local currency is gaining strength amidst persistent FX intervention, growing foreign reserves and expanding inflows from exporters as reforms turn Nigeria into a net exporting economy.
FX spot rate settled at N1455.2373 per dollar, the Central Bank of Nigeria (CBN) indicates in its daily FX update. This showed the exchange rate appreciated by 1.35% on the day from N1,475.3473 the previous day.
There was sufficient US dollar volume to meet corporate FX demand, analysts said, supported by exporters and non-bank inflows.The FX spot rate hit N1,445 per dollar as its intraday low on Thursday, and N1468 was the highest quote for the day.
In the parallel market, the local currency closed at N1475 per dollar, according to a channel check conducted by MarketForces Africa in Lagos and Abuja.
In its daily FX rate update today, international payments conducted with GTBank Naira Mastercard were quoted at N1475 – a surprise development which revealed a convergence between banks and currency bureau quotations.
Meanwhile, Nigeria’s gross external reserves balance increased to $42.326 billion as of Sept 29 – up from $42.256 billion over non-stop inflows across sources amidst oil price fluctuations.
Market prices of crude oil came under pressure as a government shutdown clouds the U.S. economic outlook while politicians show no signs of moving toward a deal. High U.S. crude inventories, coupled with expectations of increased production by OPEC+, fuel concerns of excessive supply
Brent crude and US WTI rise 0.2% to $65.51 and $61.92 a barrel, respectively, following three straight sessions of declines. OPEC+ is expected to approve a November output hike of up to 500,000 bpd, three times October’s increase, with Saudi Arabia pushing to regain market share.
Signs of oversupply are emerging, with US crude and gasoline stockpiles rising and Iraq’s Kurdish oil exports set to resume via Turkey’s Ceyhan terminal after a deal to restart flows.
Risk-off sentiment deepened as the US government shutdown dragged on, with the White House warning of mass layoffs and no progress toward a resolution. Still, China’s ongoing purchases for its strategic reserves offered some support. FCMB Delivers 16% YTD Return to Shareholders in 9 Months
