Naira Gains N5 as Foreign Investors Top Up FX Inflows
The Nigerian local currency, the naira, rallied against the US dollar, with data showing that foreign portfolio investors (FPIs) dominated the supply side. According to data from the Central Bank platform, the spot FX rate appreciated to N1544.62, gaining about N5 on the day FX liquidity eclipsed today’s demand.
In the parallel market, the naira also gained N10 to close at ₦1,570 per dollar as the market awaits the Central Bank’s final decision on FX sales to Bureau de Change operators at the official rate—which the authority planned to end in May.
Last week, the naira strengthened by N3.76 against the greenback at the forex market, closing at N1,549.35 per US dollar on Friday.
The exchange rate appreciation was supported by inflows from foreign portfolio investors during the week, Coronation Research said, and this pushed the naira to a high of N1,539.72/US$1 midweek.
The CBN disclosed it injected about US$580 million into the market in May to support the naira, complementing other inflows. But on Friday, the Naira weakened, losing about N10 to US$1,549.35/US$1.
Foreign portfolio investors (FPIs) made the highest contribution for the fourth consecutive week in a row to inflows at the Nigerian foreign exchange market last week, Coronation said. Analysts noted that the increased inflows through the official window signal renewed investors’ interest in the Nigerian economy.
This was noticeable after the MPC meetings on May 19 and 20th where the monetary policy rate was retained by the CBN, building on the rating upgrade announced in April. The non-bank corporates followed closely with 37.36%, while the exporters contributed 23.08%, and others contributed 0.57%.
There was no FX inflows from the CBN last week, which could be because the naira has been relatively stable, and the dollar has been weakening against most currencies globally due to uncertainties over US debt sustainability. Equities Investors’ Portfolio Value Rises by N512bn as Heavyweights Rally
