Naira Falls, Spot Rate Touches N1543 as FX Demand Heats Up
The naira depreciated at the Nigerian Foreign Exchange Market (NFEM) due to increased demand for foreign currency amidst a persistent decline in supply. According to data obtained from the Central Bank, the official rate weakened to N1537.90 on Tuesday from N1535.92 per dollar, suggesting demand eclipsed US dollar volume available.
FX data showed there was demand pressure on the naira at the official window, with the spot rate touching its highest in months, according to FX update released by the Central Bank today.
A review of the fx data showed that the naira touched an intraday high of N1543 as corporate demand for US dollars expanded significantly despite a total sum of $150 million in FX interventions in two tranches last week.
“The intraday high touched at the official window suggests the CBN could return to market with additional fx sales this week. The number doesn’t look good;probably demand is already heating up,” analysts said.
MarketForces Africa reported that the exchange rate was under pressure as FX inflows at the official window reduced sharply. Last week, the aggregate FX inflows moderated for the third consecutive week, settling at US$732.8 million from US$91.1 million the prior week.
Non-bank corporates emerged as the largest contributor to inflows, with US$295.0 million, surpassing Foreign Portfolio Investors (FPIs) total inflow of US$267.9 million. Inflows from exporters accounted for 19.45%, while individual inflows were minimal at 0.45%. Other international sources accounted for 3.19% of the total inflows.
Updated FX data showed external reserves increased further, settling at $40.229 billion. Notably, this is the first time since January that reserves have crossed the US$40 billion threshold. This buildup likely reflects sustained FPI inflows and a recent surge in non-bank corporates.
In the global commodity market, prices of crude oil fell as traders awaited the U.S. EIA inventory report and factored in weaker demand at the end of the summer driving season in early September. Brent crude slipped $0.50 to $66.13 per barrel, while U.S. WTI dropped $0.88 to $63.08.
Meanwhile, gold inched higher after U.S. inflation data reinforced expectations of Federal Reserve rate cuts, with spot gold up 0.14% to $3,347.75/oz and U.S. gold futures closing $0.70 higher at $3,399.70. Commodity prices are expected to trade in line with the expectation of other key economic data due this week. #Naira Falls, Spot Rate Touches N1543 as FX Demand Heats Up Nigeria Non-Oil Exports Hit $3.225bn in Half-Year 2025 – NEPC DG
