Naira Falls to N1528 amidst CBN FX Sales to Banks
The naira fell against the US dollar in the foreign exchange market as a result of a foreign currency shortage, first trading session after the Apex Bank intervention. Reflecting tight FX liquidity, the exchange rate worsened at the official window closing at N1528 per greenback as demand exceeded the supply.
Hence, the naira depreciated by 0.66% in the official window, closing at N1,528.03 per dollar. Similarly, the naira ended the day at ₦1,570 per dollar in the parallel market.
The local currency had witnessed a last-minute rally on Friday as the authority stepped up efforts to boost FX inflows sufficient enough to curb exchange rate pressure. Due to significant fluctuation in money pricing last week, the Central Bank (CBN) sold $360 million to authorised dealer banks at controlled rates.
Analysts at AIICO Capital Limited stated that the market faced strong demand pressure despite the CBN’s intervention. The US dollar for naira pair traded within a range of N1,512 to N1,552, leading to a 67-bp depreciation of the naira, which closed at N1,528.03.
Foreign reserves rose to $38.35 billion amidst a declining global crude oil market. Oil prices rose slightly after the U.S. reaffirmed its commitment to striking Yemen’s Houthis until the Iran-backed group ceases attacks on shipping. Meanwhile, positive economic data from China boosted hopes for stronger demand.
President Donald Trump ordered military action against the Houthis on Saturday following their assaults on Red Sea trade routes. U.S. official suggested the campaign could last weeks. Brent crude climbed 28 cents, or 0.4%, to $70.85 per barrel, while U.S. West Texas Intermediate gained 22 cents, or 0.3%, to $67.39.
Gold prices remained firm, hovering just below the $3,000 mark, with investors focused on trade tariffs and the Federal Reserve’s policy meeting. Spot gold rose 0.4% to $2,994.79 an ounce after hitting a record of $3,004.86.
Analysts expect more volatility, as OPEC+’s decision to increase oil production from April has weighed on prices. However, the potential for stricter U.S. sanctions on Iran outweighs the impact of the gradual OPEC+ output hike. #Naira Falls to N1528 amidst CBN FX Sales to Banks
