IMTOs, Offshore Investors’ FX Inflows Boost Naira Value – Update
Boosted by fresh US dollar inflows from international money transfer operators, the naira appreciated week on week, supported by significant US dollar volume that passed through the supply side in the currency market.
The exchange rate’s positive movement against the greenback recorded last week was largely supported by a softer U.S. dollar—following weaker-than-expected U.S. economic data.
The official spot rate was shaped by robust liquidity inflows from offshore investors and International Money Transfer Operators (IMTOs), investment firms – Cordros Capital Limited, and AIICO Capital confirmed.
The foreign exchange market experienced strong dollar supply, pushing rates to ₦1,475.35/$.The local currency exchange rate was influenced by steady interventions, and improved flows anchored the market within the ₦1,445–₦1,468/$ band, containing volatility.
The naira strengthened modestly over sustained dollar supply and tempered demand, closing at ₦1,465.68/$, up 101 basis points week on week.In the parallel market, the naira strengthened by 1.48% to N1,488/$, reflecting the positive spilloverfrom improved liquidity conditions and growing external reserves.
Nigeria’s foreign reserves continued their twelve-week rally, rising $150.99m to $42.41bn as of October – buoyed by inflows from oil receipts, remittances, and portfolio investments.
Nigeria’s Bonny Light crude slipped by 4.66% to $69.94 per barrel, raising concerns over potential revenue pressures for the government and broader fiscal implications should oil prices remain subdued in the short to medium term.
The oil market posted a weekly loss of 8.1% after news of potential increases to OPEC+ supply. Brent crude futures for November delivery settled at $64.53 a barrel, down $4.69, or 6.78%. West Texas Intermediate crude futures settled at $60.88, down $4.84, or 7.36%.
Gold prices rose on Friday, hovering near record highs and heading for a seventh consecutive weekly gain, supported by growing concerns over the economic impact of a prolonged U.S. government shutdown and expectations of interest rate cuts.
Spot gold was up 3.31% at $3,886.84 per ounce. Mixed performance is anticipated in the new week, as gold is expected to remain strong, supported by hopes of U.S. rate cuts and concerns over a potential government shutdown, with prices possibly testing $4,000/oz.
Other sectors may face pressure from anticipated OPEC+ supply increases and shifting investor sentiment. # IMTOs, Offshore Investors’ FX Inflows Boost Naira Value – Update Foreign Investors Dump Nigeria, Ghana, Angola Eurobonds
