Naira Gains as CBN Supplies Additional FX Worth $98m
The naira exchange rate rose to N1611 per US dollar in the Nigerian foreign exchange market as the Central Bank sold more dollars to boost supply. The total FX sales by the Central Bank of Nigeria (CBN) inched above $560 million in four days to step down pressure against the local currency.
Cardinalstone estimated monthly FX sales of $714.65 million, which the investment firm said can be sustained for 32 months. Meanwhile, the market anticipates fresh OMO bill sales could drive US dollar inflows into the economy, though the authority has become less aggressive as part of efforts to reduce the nation’s debt costs.
Some analysts told MarketForces Africa that for OMO bills to see the kind of FX the country needs, the authority will have to increase spot rates. Analysts expressed that hot monies are currently going to where they can be treated well, saying that the 14% tariff on Nigeria’s export has raised the country’s risk.
The CBN has slowed down its OMO bill sales with one auction each in February and March.
“If there is a halt in OMO issuance, this could prompt a new bid for US dollars as foreign investors bring funds out of the country and, similarly, domestic investors look to hedge their exposure,” Verto said in a macro update.
“Earlier today, the CBN released Nigeria’s external position for 2024, which indicated that the current account surplus settled at $6 billion from a negative amount in 2023.
Elsewhere, the technical sub-committee on crude and refined product sales lifted the suspension of the “Naira-for-crude” policy, reaffirming the initiative as a strategic, long-term policy to support local refining.
The CBN sold $98 million at rates between N1,625 and N1,640, AIICO Capital Limited told investors in a note. Analysts noted that the US dollar value of the Nigerian naira pair traded within a range of N1,610 to N1,650.
Analyst said heightened risk aversion is driving offshore investors to sell, yet the CBN is expected to persist with market-stabilizing measures Oil prices rebounded on Wednesday, recovering from earlier four-year lows after U.S. President Donald Trump announced a tariff hike on China but also paused tariff increases for other countries.
Trump authorized a 90-day delay for most countries while imposing a 125% tariff on China, effective immediately. The previously set 104% tariff on China began. Brent crude fell below $60 per barrel, while U.S. West Texas Intermediate fell to $57.
Gold surged more than 3%, driven by a weaker dollar and heightened demand for safe-haven assets, with spot gold rising 3.4% to $3,086.04 an ounce. U.S. gold futures increased 3.7% to $3,101.70. #Naira Gains as CBN Supplies Additional FX Worth $98m #Naira Gains as CBN Supplies Additional FX Worth $98m FCMB Climbs as Investors Await Audited Results
