Naira Gains after CBN Tops FX Interventions with $150m

Naira Gains after CBN Tops FX Interventions with $150m

The Nigerian naira rallied at the forex market after the Central Bank (CBN) topped up FX sales amidst rising external reserves, which continues to boost investors’ and the market’s confidence in the exchange rate outlook. 

The official exchange rate saw a sharp daily gain, reflecting a stronger US dollar volume available for closing eligible foreign transactions. Sources said the Apex Bank injected dollars into FX market, though official data has not been made available to know the size.

The CBN sold an additional $150 million on Friday, which was not captured, bringing last week’s total intervention to $400 million. According to updated data from the Central Bank of Nigeria (CBN), the official spot FX rate appreciated by 0.52% per dollar to close at N1,446.32 from N1453.84 per dollar the previous day.

The exchange rate at the official window touched an intraday high of N1455, a significant improvement from N1462.5000 that was quoted for international payment in the previous day.

FX traders in some of the leading investment and commercial banks said the exchange rate briefly touch N1441 on the day, the lowest FX quoted for international payments on Tuesday.

The trading pattern reflected the absence of significant pressures on the local currency, signalling FX liquidity boost as the Central Bank maintained its stance on market intervention.

The naira, however, fell by 1.30% to N1,475 per dollar in the parallel market, highlighting diverging dynamics between the tightly managed official segment and the more demand-driven black market.

Nigeria’s foreign reserves expanded to $44.459 billion on Monday amidst sustained FX inflows across sources, including oil sales and remittances.  Month to date, gross external reserves surged by $1,262 billion, from $43.197 billion at the end of October.  #MTN Nigeria Sets to Pay Shareholders Interim Dividend