Naira Lost N3/$ as Data Shows FX Inflow Declines
In the absence of FX intervention sales, the naira lost about N3 per US dollar at the Nigerian foreign exchange market (NFEM) to close at N1605.62 on Monday from N1602.18 on Friday, data from the Central Bank (CBN) revealed.
In the parallel market, the naira appreciated by 1.25% to N1,600 as the market anticipated the end of FX sales to Bureau de Change (BDC) scheduled to end in May by the Apex Bank.
The CBN was absent in the forex market to boost FX liqudity, though analysts have maintained that the authority’s participation in the market will continue to provide support for the naira.
The interbank FX market saw heightened demand, according to AIICO Capital Limited, and analysts said the US dollar and naira pair traded between N1,601.98 and N1,611.00.
By the end of the session, the naira weakened by 22 bps, closing at N1,605.6284. “CBN participation should maintain the naira within its existing trading range through the near term,” AIICO Capital Limited wrote.
Last week, the naira dipped as the Nigerian autonomous foreign exchange market window inflow declined by 10%, to US$668 million, compared to US$735 million in the previous week.
According to Coronation Research, the CBN accounted for 27.73% of the total inflow, foreign portfolio investors (FPIs) contributed 9.22%, and non-bank corporates supplied 33.43% of the total inflows. In addition, the investment firm said exporters contributed 24.34% of the inflows, while other sources accounted for the remaining 5.28%.
External reserves climbed $38 billion due to fresh accretion after successive declines in April amidst uncertainties in the global commodity market. Oil prices declined by over $1 a barrel on Monday after OPEC+ announced plans to speed up output increases, sparking fears of oversupply amid uncertain demand conditions.
Brent crude fell $1.54, or 2.51%, to $59.75 a barrel, while U.S. West Texas Intermediate (WTI) crude dropped $1.64, or 2.81%, to $56.61.
Meanwhile, gold prices climbed more than 2% as a weaker U.S. dollar and heightened safe-haven demand boosted investor interest ahead of a key Federal Reserve policy decision expected later in the week.
Spot gold rose 2.2% to $3,312.09 an ounce, and U.S. gold futures increased 2.4% to $3,321.30, continuing gold’s recent upward trend.
Analysts said the oil market will likely extend its downward trajectory, facing dual pressures of demand uncertainty from tariff risks and fresh supply-side unpredictability from OPEC+ policy shifts. #Naira Lost N3/$ as Data Shows FX Inflow Declines
