CBN Slowdown Naira Appreciation, Mops Up U.S. Dollar
The Nigerian naira traded positively against the US dollar (NGNUSD) at the official window in the absence of demand pressures, with the Apex Bank initiating reverse FX intervention to slowdown rally.
The spot FX rate improved at the Nigerian foreign exchange market (NFEM), supported by inflows from foreign portfolio investors, exporters, and non-bank corporates, among other eligible sources.
The local currency experienced a significant uptrend against the US dollar, and the successive gains moved the CBN to purchase $72 million from the FX market, according to TrustBanc Financial Group Limited.
From N1445 on Dec 30, the naira has gained N87, when the spot rate hit an intra-week low of N1358 per dollar, which appeared to make the Apex Bank uncomfortable.
“The CBN intervened in the FX market on Wednesday, purchasing $72 million to slow the pace of the naira’s recent appreciation. Following the intervention, the naira eased by ₦7.77 in the official market to close at ₦1,366.06/$”, the investment firm said in a note.
In their separate review, analysts highlighted that stronger offshore investors participation in Nigeria’s financial market has continued to boost US dollar volume, reflecting elevated yields on investment securities.
External reserves surged, driven by inflows from oil receipts and across other sources, including remittances, boosting investors’ sentiment in the currency market.
At the close of the week, the Naira strengthened by ₦20.36 per greenback to close at ₦1,366.1954 compared to ₦1,386.55 recorded previously.
During the week, the local currency traded within the range band of ₦1,348.00 and ₦1,396.00 per US dollar, showing consistent appreciation across all trading sessions.
“We expect this trajectory to continue, largely driven by rising external reserves, renewed foreign portfolio inflows, and declining speculative demand, among others”, said analysts at Anchoria Securities Limited.
The investment firm said near-term FX market stability to persist underpinned by policy measures and improving market confidence amidst growing external reserves.
Nigeria’s gross external reserves trended higher last week, increasing by $736.67 million to $46.91 billion, providing additional confidence and cushioning short-term pressures. Brent crude weakened over the week, declining by –3.21% w/w as persistent oversupply concerns overshadowed geopolitical risks.
The benchmark declined from $70.69/bbl to $67.60/bbl, reflecting market expectations of a continued global surplus driven by rising non-OPEC+ output and modest demand growth.
Anchoria Securities said forecasts for 2026 point to Brent trending toward the low $60s as structural oversupply remains the dominant market theme.
Oil price direction will depend largely on how quickly the market absorbs the projected surplus and whether demand indicators begin to stabilize enough to offset ongoing supply-side pressure.
Gold rallied more than 3% on Friday, poised for a decent weekly gain as dip buyers emerged, following a session that pushed the yellow metal below the $4,800 mark.
Spot gold gained $100.87 last week to close near $4,966.22/ounce. CBN Cuts 1-Year Treasury Bill Rate by 138bps, Rejects Bids
