Naira Appreciates as Nigeria’s Foreign Reserves Kiss $40bn
The Nigerian naira appreciated in the official window as foreign reserves surged to approximately $40 billion after sustained FX inflows. The confidence boosting reforms and relatively higher yields in the debt market spurred foreign currency inflows into the markets.
Spot data from the FMDQ platform showed that the naira appreciated by 0.33%, closing at ₦1,671.32 per US dollar at the official market on Tuesday.
Reduced demand for the US dollar in the official window supported the positive exchange rate move as the market anticipates the Central Bank of Nigeria (CBN) FX auction for the week.
While the exchange rate remained unimpressive, FX volatility in the official market has pushed the FX curve closer to parallel market rates, narrowing the gap.
In the parallel market, the Naira closed at ₦1,710 per US dollar after gaining N15 on the day as Nigerians began cutting back imports due to tight household spending.
At the current level, the exchange rate gap settled at N39, well below the FX gap reported in October 2024. Data from the CBN portal showed foreign reserves climbed to $39.956 billion, supported by sustained inflows from various sources amid uncertainties in the global commodities market.
FMDQ reported that total inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) rose to a five-month high in October, increasing by 40.2% to US$3.04 billion from US$2.17 billion in September.
Analysts said the improvement was mainly due to a substantial increase in foreign inflows (44.6% of total inflows). In comparison, collections from local sources (55.4% of total inflows) dropped for the second consecutive month.
Oil prices remained stable after a more than 2% rise in the previous session, as OPEC+ postponed its December production increase.
As a result, Brent crude reached $76.08, while WTI rose to $72.55. Gold prices also rose as investors braced for potential political uncertainty, with polls indicating a close race between Donald Trump and Kamala Harris.
Gold is currently valued at $2,750.50 per ounce.#Naira Appreciates as Nigeria’s Foreign Reserves Kiss $40bn# Naira Falls to N1,486 as FX Crisis Deepens
