Naira Appreciates on Huge US Dollar Turnover in FX Market
The naira exchange rate appreciated at the official FX window on the back of huge US dollar turnover in the currency market. The local currency stayed on the uptrend while the external reserves dropped down to $37.3 billion, according to data from the Central Bank of Nigeria (CBN)
The local currency sustained its modest appreciation in the week, supported by intermittent foreign portfolio investor (FPI) and exporter inflows. Some oil monies were noted to boost FX inflows, keeping the supply side strong despite zero intervention from the CBN.
Early in the week, trading was quiet with rates anchored within the $/₦1500–1558 range and a fixing of ₦1549.57, investment firm AIICO Capital Limited revealed.
Analysts said improved dollar supply in the foreign exchange market kept pressure at bay despite the absence of FX intervention sales by the CBN. The market remained relatively stable mid-week, with marginal fixing movements around ₦1550.
Activity picked up sharply toward the end of the week, as a surge in turnover, reportedly $324 million, boosted liquidity and drove spot rates as low as $/₦1510–1520.
The fixing dropped to ₦1549, reflecting stronger supply. By Friday, the naira closed at $/₦1539.2359, appreciating by 52.5 basis points week on week, while external reserves fell by $293.87 million to $37.369 billion.
Elsewhere, oil prices inched higher on Friday, rebounding slightly after dipping midday on reports that OPEC+ might raise output in August. The oil cartel is expected to implement output raise agreed with members for July.
Despite the modest recovery, oil posted its steepest weekly loss since March 2023, sliding about 12%. Brent crude settled at $67.77 per barrel, up just 4 cents, or 0.1%, while U.S. West Texas Intermediate (WTI) crude rose 28 cents, or 0.4%, to finish at $65.52.
Meanwhile, gold prices fell sharply, losing 2% on the day and hitting a nearly one-month low. A U.S.-China trade agreement lifted risk appetite, weakening demand for safe-haven assets.
Spot gold dropped 1.5% to $3,277.17 an ounce and was down 2.8% for the week. The market has nearly moved past last week’s geopolitical risks and should now focus more on fundamentals driven market.#Naira Appreciates on Huge US Dollar Turnover in FX Market#
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