Naira Closed at N1365 in FX Market, Foreign Reserves Rebound
The naira closed stronger at N1365 per US dollar at the official currency market, gaining about N3 week on week from N1368 at the beginning of last week’s trading session.
The market recorded sharp liquidity fluctuation that caused the local currency to give up earlier gains in the last three trading sessions at the Nigerian foreign exchange market (NFEM).
The local unit appreciated by 0.19% week-on-week to close at N1,365.69, according to data released by the Central Bank of Nigeria (CBN). The local currency depreciated by 0.06% in the parallel market, settling at N1410 per dollar demand from informal segment players.
Amid swings in crude oil prices, Nigeria’s external reserves rose marginally by 0.15% week-on-week to US$52.00 billion, reflecting a continued improvement in the country’s external liquidity position.
Oil prices declined as supply risk eased amid U.S.-Iran diplomatic talks to restore peace in the Middle East and reopen the Strait of Hormuz, which is expected to further reduce the global energy crisis.
But vessel traffic through the Strait of Hormuz declined compared with the previous week, amid lingering uncertainty surrounding the negotiations and the prospects for the reopening of the Middle East’s critical oil and LNG transit corridor.
FX traders reported that between Monday and Thursday, 33 vessels transited the Strait, down from 50 vessels over the corresponding period in the previous week.
At the time of writing, Brent crude traded at US$82.22 per barrel, while West Texas Intermediate (WTI) was priced at US$77.22 per barrel.
Bonny Light crude declined by 6.04% to US$89.06 per barrel. The naira is expected to remain relatively stable in the near term, supported by stronger external reserves and continued foreign exchange interventions.
Analysts anticipate that oil prices are likely to remain volatile amid geopolitical developments, OPEC+ policy decisions, and global demand dynamics, with implications for Nigeria’s export earnings, fiscal revenues, and external reserves. CBN Allots N2.2tn OMO Bills to Match Banks, Foreign Investors Demand
