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. The positive exchange rate direction was supported by reduced demand for US dollar in the official window as the market anticipates the Central Bank of Nigeria (CBN) FX auction for the week.
While exchange rate remained unimpressive, FX volatility at the official market has shifted FX curve near the parallel market rates, with gap narrowing. In the parallel market, the Naira closed at ₦1,710 to the US dollar after gaining N15 on the day as Nigerians began to cutback imports due to tight household spending.
At the current level, the exchange rate gap settled at N39, quite lower than the previous FX gap reported in October 2024. Data from the CBN portal revealed that foreign reserves climbed to $39.956 billion, supported by sustained inflows from various sources amidst 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$3.04 billion in October from US$ 2.17 billion in September.
Analysts said the improvement was primarily due to a substantial increase in inflows from foreign sources (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, following a more than 2% rise in the previous session due to OPEC+ postponing its December production increase.
As a result, Brent crude reached $76.08, while WTI rose to $72.55. Additionally, gold prices increased as investors prepared 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
