Naira Depreciates Against Dollar Despite CBN FX Injections
The naira depreciated against the US dollar at the Nigerian foreign exchange market (NFEM) due to increased demand from eligible companies for external payment.
The exchange rate weakened by an average of N2.38 per dollar week on week to N1,534.72 as total foreign currency demand outpaced available supply.
This forced the Central Bank of Nigeria (CBN) to react with direct foreign exchange market intervention to stabilise exchange rate at target range to stem the negative tide.
The CBN intervened by selling approximately $81 million to support the market, AIICO Capital Limited said in its market update.
The Nigeria’s gross external reserves continue to grow despite uncertainties in the global commodity. Data from the CBN revealed that Nigeria’s gross external reserves rose for the third consecutive week, up by $778.34 million week on week to $38.632 billion.
Analysts at AIICO Capital Limited expect the current stability in the FX market to persist in the near term, supported by the CBN ongoing refinement of existing policies.
Last week, global oil prices declined to a three-week low, weighed down by weak economic indicators from the U.S. and China.
Concerns grew following an unexpected drop in U.S. manufactured capital goods orders for June and speculation of a possible rate cut after President Trump’s meeting with the Fed Chair.
Meanwhile, China reported a 0.3% year-on-year decline in fiscal revenue for H1 2025. As a result, Brent crude fell by $1.24 to $68.04 per barrel, while U.S. West Texas Intermediate (WTI) dropped $2.25 to $65.09.
In the precious metals market, gold prices slipped 0.4% week on week to $3,336.58/oz) as the easing of trade tensions—following tariff agreements between the U.S. and Japan, and the U.S. and EU— reduced safe-haven demand.
Oil prices are likely to move in the direction of a combination of factors, such as geopolitical developments, changes in supply and demand, and production decisions by major producers (OPEC+), when they meet next week. #Naira Depreciates Against Dollar Despite CBN FX Injections#
