Naira Rallies as CBN Keeps FX Tap Open to Banks, BDCs
Trading steady against the US dollar, the naira continues to enjoy the support of the Central Bank of Nigeria (CBN) FX interventions across the markets this week. Exchange rates settle in a range as demand for foreign payment obligations has been met successively by the volume of US dollars available in the market.
The latest exchange rate trend showed pressure from invisible FX users demand usually experienced in the parallel market has eased. Analysts said the fact that banks’ customers can access foreign currency for business and personal traveling allowances has triggered competition against the Bureau de Change (BDCs) operators.
With the CBN acting as FX supply between the official and parallel markets, exchange rates have stabilised and a slew of naira bulls are of the view that momentum will persist until the authority alters its position.
In the market on Thursday, the naira appreciated by 0.05% in the official window, closing at ₦1,498.28 per dollar. Similarly, the naira ended the day at ₦1,495 per dollar in the parallel market.
The Nigerian Foreign Exchange Market (NFEM) maintained stability, with trading rates ranging between $/₦1,496.00 to $/₦1,500.50. Data from the CBN showed that external reserves fell to $38.5 billion amidst fluctuation in FX inflows, remittances, and crude oil revenue.
Oil prices climbed 2% as supply concerns resurfaced following U.S. President Donald Trump’s decision to revoke Chevron’s license to operate in Venezuela. However, gains were limited by signs of a possible Ukraine peace deal, which could boost Russian oil exports, and an unexpected rise in U.S. gasoline and distillate inventories.
Brent crude rose $1.43 (2%) to $73.96 per barrel, while US West Texas Intermediate (WTI) gained $1.46 (2.1%) to $70.08. Meanwhile, gold prices dropped to a two-week low as a stronger dollar and inflation data anticipation pressured the market, with spot gold down 1.2% at $2,882.49 an ounce. #Naira Rallies as CBN Keeps FX Tap Open to Banks, BDCs Naira Exchange Rates Switch Positions in FX Markets
