Naira Plummets, External Reserves Dip as CBN Auctioned $300m
The naira exchange rate plummeted against the US dollar as importers and companies required higher units of the local currency to settle foreign payments in the just concluded week. According to spot data from the official market, the naira depreciated by 0.3% to N1,547.58 per greenback despite three times FX intervention sales in the week.
Transactions were consummated between N1,543.00 and N1,570.00, AIICO Capital Limited said in a note, adding that. by weekend, enhanced IS dollar liquidity led to a tighter range of N1,540.20 to N1,552.00.
The Central Bank of Nigeria (CBN) auctioned US dollars to authorised dealer banks three times in the week to boost FX liquidity in the official market. The Apex Bank sold a total of US$300.90 million to authorised dealers amidst surging demand for foreign currencies for eligible international payments.
As a result, the country’s FX reserves declined for eight consecutive times to settle at $40.350 billion, from the peak of three years high of N$40.92 billion in the first week of 2025.
In the forwards market, the naira rates appreciated across contracts. Traders said in their reports that FX forward contract for 1 month rose by 0.2% to N1,589.78 per US dollar.
Also, the 3-month FX contract appreciated by +0.6% to N1,654.40 per dollar. The 6-month fx forward contract climbed by +1.4% to N1,751.59 while the 1-year contract rose by +3.0% to N1,935.72 per US dollar, Cordros Capital Limited said in a note.
“We highlight that while naira yields have remained attractive, the existing geopolitical risks, which have now been compounded by the expectation of rising global trade protectionism, have continued to constrain capital flows, limiting foreign portfolio investors’ inflows to the FX market.
“With rising demand and still limited inflows, the naira is likely to face pressure in the near term, causing a gradual naira depreciation despite CBN interventions,” the investment firm said. Overall, the Naira lost ₦4.55 and ₦15.00 to close at $/₦1,547.58 and $/₦1,670.0 in the official and parallel markets, respectively.
Consequently, the spread between the two markets widened to 7.91% from 7.26% the previous week, TrustBanc Financial Group Limited noted. Elsewhere, oil prices experienced a minor decline but achieved a fourth consecutive week of increases, as the latest U.S. sanctions on Russian energy trade raised concerns about potential oil supply disruptions.
Brent crude increased to approximately $80.79 per barrel, while West Texas Intermediate (WTI) was trading at roughly $77.88. Additionally, gold prices faced downward pressure due to a rise in the U.S. dollar on Friday.
Coomodities markets remained poised for a weekly gain as uncertainties surrounding incoming President Donald Trump’s policies and renewed speculation regarding further rate cuts pushed bullion above the important $2,700 mark. Gold was valued at about $2,701.03 per ounce #Naira Plummets, External Reserves Dip as CBN Auctioned $300m FBN Holdings Records Huge Off-Market Shares Transactions
