Naira Appreciates as Nigeria’s Foreign Reserves Top $52bn
The naira gained against the US dollar at the Nigerian foreign exchange market (NFEM) amidst growing optimism about the nation’s expanding gross external reserves.
The spot rate appreciated by 35 basis points to close at N1375.3083 per US dollar at the official window on Tuesday, a substantial gain from N1380.1093 quoted the previous day.
Reflecting improved FX liquidity in the currency market, intraday transactions were conducted between N1374 and N1379 per dollar at the NFEM window, according to data released by the Central Bank of Nigeria (CBN).
The official data released indicates that financial institutions’ FX trading activities increased in aggregate transaction volume and value. Interbank FX turnover increased sharply, up by more than 21% on the day to $322.644 million from $266.227 million the previous day.
Interbank FX deal count also climbed to 110, from 66, as banks bid for international payments on behalf of their corporate clients increased.
Latest data from the CBN revealed external reserves topped $52 billion due to sustained FX inflows across multiple sources, including hydrocarbon sales receipts. Gross external reserves surged to $52.024 billion from $51.942 billion – increasing the CBN buffer to defend the local currency.
Oil prices rose over 2% on Tuesday as fighting between the United States and Iran intensified, with Tehran stepping up attacks on neighbouring states, plus oil tankers that reportedly tried to transit through the Strait of Hormuz.
Brent is above $90 per barrel, and US West Texas Intermediate (WTI) is hovering around $86 over sustained supply risk concerns in the global commodity market.
Two weeks after the conflict resumed, sirens were sounding in Bahrain and Jordan, which said they intercepted two waves of missiles and drones. Kuwait also said Iran hit several power and water desalination plants on Monday, causing fires in the fourth such attack in as many days.
Iran’s Yemeni allies, the Houthis, declared that they would blockade Saudi Arabia’s ports – a move that could throw the world’s energy markets into further chaos after the Islamic republic blockaded the crucial waterway. Oil Prices Surge, Brent Tops $90 on Heightened Supply Risk
