Naira Mixed as Foreign Reserves Climb Near $40bn
The Nigerian naira exchange rates diverged across official and parallel markets as accretion into the nation’s foreign reserves increased gross external reserves to about $40 billion this week.
The Central Bank of Nigeria (CBN) FX data updated on Wednesday revealed that the naira depreciated against the dollar at the official window, settling at N1534.43 from N1533.10 on Tuesday.
The spot rate touched an intraday high of N1537.25 in the absence of CBN’s FX intervention following the latest FX inflows from open market operations. The market experienced a shift in FX liquidity as the local currency closing exchange rate settled at N1537 from N1533.50 in the previous day.
The CBN has been playing low in the official window, reflecting some sort of stability achieved even without significant dollar sales to authorized dealers and banks in recent weeks. In the parallel market, the spot rate appreciated to N1535 per dollar amidst intermittent demand and supply.
The black market rate has been volatile as a result of seasonal demand from holiday-bound travelers; some banks have been recording surging demand for personal travelling allowance. Nigeria’s gross external reserves reached $39.814 billion on Monday, with sustained inflows that have persisted since last month.
With oil prices stable, external reserves could be well above the $40 billion mark this week, strengthening the CBN position to defend the local currency. Analysts said market stability in August will be shaped by oil prices, CBN’s FX actions, and global sentiment, with support from stronger reserves and policy tightening, though risks from lower oil prices and global uncertainty persist.
Oil prices slid to an eight-week low after President Trump’s remarks about progress in talks with Moscow created uncertainty on whether the U.S. would impose new sanctions on Russia. Brent crude dipped 95 cents to close at $66.69 a barrel, while U.S. West Texas Intermediate (WTI) crude shed 97 cents to $64.19.
Similarly, gold prices eased as investors booked profits after prices hit a near two-week high in the previous session, while the market’s focus shifted to President Trump’s upcoming Federal Reserve nominations.
As such, the spot gold receded by 0.39% to $3,368.01 per ounce, while U.S. gold futures dipped 0.22% to $3,430.52 per ounce. The market is expected to trade in line with the new U.S. tariff on India and the possibility of a ceasefire between Russia and Ukraine. #Naira Mixed as Foreign Reserves Climb Near $40bn# Nigerian Exchange Expands to N92.25trn after 25-Day Rally
