Central Bank Funds FX Payments with $150m as Inflow Drops
The Central Bank of Nigeria (CBN) funded international payments with additional $150 million sales to banks and authorised dealers at the official window.
The local currency came under intense pressure, reflecting a steep increase in imports. Market participants saw a sequence of exchange rate swings amidst limited FX inflows.
Last week, the CBN led the pack in terms of FX supply into the market as total inflows fell by about 50% week on week from $1.46 billion in the previous week.
Foreign portfolio investors’ inflows ranked behind exporters and the CBN supply, but there was support from non-bank corporate dollar volume.
At the close of the trading session on Tuesday, the Naira appreciated against the US Dollar amid improved supply levels, a day after the monetary authority flooded the official window with $150 million in FX supply.
Hence, the official spot FX rate rose by ₦6.57 per US dollar to close at ₦1,449.99/$, having traded within a range of ₦1,455.50 and ₦1,447.50 per USD during the session.
Updated data from the CBN also revealed that the nation’s gross external reserves climbed by $19.19 million to $45.24 billion, pushing the Year-to-Date (YTD) gain up to +10.66%.
Elsewhere, global oil prices edged up on Tuesday as investors assessed stronger-than-expected U.S. economic growth and the risk of disruptions to oil supply from Venezuela and Russia.
Brent crude inched up 72 cents or 1.17%, to $62.30 per barrel, while U.S. West Texas Intermediate (WTI) followed with 25 cents increase, or 0.43%, to $58.26. Similarly, gold edged up 0.8%, powered by safe-haven flows.
Spot gold crept up 0.96% to $4,488.47/oz, while U.S. gold futures followed up with 1.09% leap to $4,518.15/oz. Analysts expect oil prices to remain supported by supply-side geopolitical risks, while gold stays firm on safe-haven demand. MTN Nigeria Hits 52-Week High as Investors Double Down Bets
