Naira Closed at N1,328 as FX Demand, Supply Even Out
The Nigerian naira closed relatively flat at N1,328 per US dollar in the foreign exchange market on Thursday as demand and supply of hard currency evened out.
According to data released by the Central Bank of Nigeria (CBN), the naira closed at N1,328.6687 per greenback, a slight decline from N1,328.4974 the previous day.
The exchange rate hovered between N1326 and N1330 during Thursday’s trading session; the spot FX movement suggests a lack of significant pressure. The intraday exchange rate signals an improvement from the previous quote.
In the interbank market, financial institutions’ activity declined, and US dollar trading volume also fell. Interbank FX turnover declined by more than 62% to $105.954 million, according to CBN data, down from $279.187 million reported the previous day.
The number of FX deals closed at the interbank window moderated to 103 from 183 recorded on Wednesday, according to a daily FX report obtained.
In the parallel market, the naira firmed up 0.14% to N1,385, narrowing the gap between the two-currency market to about N56 from N59.
The local unit appreciated against the British pound and the euro in both markets: officially to N1,758.36 and N1,511.63, and in the parallel market to N1,875.00 and N1,565.00.
Nigeria’s gross external reserves ticked upward to $54.834 billion as the race towards the $55 billion mark gained momentum. The external reserves momentum was driven by sustained FX inflows into the economy.
Oil prices are noted as the top driver of foreign reserves accretion, supported by elevated prices in the global commodity market.
Gold fell for a third day, down 0.25% to $4,316.15 an ounce, as hopes for US-Iran talks and a Fed that is raising rates kept demand for safe havens low. It is now down 0.94% for the year.
Brent held above $100 per barrel. Houthi missile attacks on Saudi Arabia and an Iranian threat to widen the war to the Indian Ocean lifted Brent 1.82% to $104.41 a barrel, taking its gain for the year to 71.56%.
Reports that US and Iranian negotiators are discussing a phased reopening of the Strait of Hormuz trimmed the rise. Brent is expected to hold above $100 a barrel until a deal reopens the Strait of Hormuz; prices at this level support Nigeria’s export earnings. Oil Prices Dip as Saudi Provides Alternative Exports Route
