Naira Mixed as FPIs Exit Heats Up FX Demand, Spot Rates Unify
The naira depreciated against the US dollar in the official window as foreign portfolio investors (FPIs) that have been moving funds into safe havens continue to put pressure on the local currency. The black market rate, however, appreciated.
In the Nigerian forex market, the Naira depreciated by 1.13%, closing at ₦1,629.94 per US dollar amidst unending intervention by the Central Bank. Similarly, the Naira ended the day at ₦1,630 per dollar in the parallel market.
The gap between official and parallel market rates narrowed sharply to 6 kobo due to opposite movement in spot rates in the currency market in recent times. Investment analysts said the interbank market remained bid amid continued demand pressure.
To stabilize the market, the CBN intervened by selling $135.45 million at rates between $/₦1,500 and $/₦1,636. During the session, the USD/NGN pair traded within a range of $/₦1,515 to $/₦1,631.
The nation’s external reserves declined to $38.08 billion amidst aggressive FX intervention to keep the naira stable. Though crude oil prices dropped over 4% on Thursday, weighed down by President Donald Trump’s decision to sharply raise tariffs on China, despite a 90-day pause on increases for most other countries.
U.S. crude declined by $2.66, or 4.27%, to settle at $56.69 per barrel, while Brent crude dropped $2.64, or 4.03%, to $62.84. Meanwhile, gold prices soared nearly 3% to a record high as a weakening dollar and intensifying U.S.-China trade tensions boosted demand for safe-haven assets.
Spot gold surged 2.5% to $3,158.28 an ounce, after hitting an all-time high of $3,171.49 earlier in the session. U.S. gold futures also climbed 3.3% to $3,179.40. Trump raised China tariffs to 125% from 104%. #Naira Mixed as FPIs Exit Heats Up FX Demand, Spot Rates Unify Afreximbank to Establish Trade Centres in Africa’s Commercial Capitals
