Naira Rallies as Exporters Flood Forex Market with Dollars
The naira rallied against the US dollar in the official forex market as data revealed that exporters’ inflows drove liquidity. FX spot data from the Central Bank showed the exchange rate closed at N1579.40 at the Nigerian foreign exchange market, from N1580.44.
The local currency experienced an all week rally against the greenback last week, supported by $190 million in FX intervention sales. Hence, the naira appreciated for the second consecutive week in a row, gaining 1.14% against the US dollar in the official spot market, closing at N1,580.44.
Foreign investors’ confidence in the Nigerian market has continued to drive FX inflows, with much-needed support from the exporters and international oil companies. The Nigerian autonomous foreign exchange window recorded an inflow of US$3.38 billion compared to US$4.29 billion in the previous week, Coronation Research said in a forex market update.
The firm said the inflow into the window reduced by 21.28% week on week, noting that exporters’ receipts accounted for a significant size of the total US dollar volume in the market. According to the update, exporters accounted for 75.54% of FX inflows in the market; the CBN accounted for 2.98% of the total inflow.
Also, foreign portfolio investors contributed 9.72% to the US dollar volume, non-bank corporates supplied 9.61%, while other sources accounted for 2.15%. Despite the twist in the global commodity market, there was a sequence of inflows into the country’s foreign reserves.
Oil prices were mostly unchanged on Monday as markets awaited a key OPEC+ meeting, rescheduled to May 31, where eight member countries will discuss their voluntary output cuts.
Brent crude dipped slightly, closing down four cents at $64.74 per barrel, while U.S. West Texas Intermediate crude held steady at $61.53. Meanwhile, gold prices declined nearly 1% after U.S. President Donald Trump withdrew his threat to impose 50% tariffs on European Union goods starting June 1.
The move reduced investor demand for safe-haven assets. Spot gold slipped 0.8% to $3,332.04 an ounce, while U.S. gold futures dropped 1% to $3,331.90. External reserves increased by 0.48% to close at US$38.56 billion. United Capital Grows Profit by 64% to N5.89bn in Q1
