Naira Rallies to N1466/$ as Foreign Reserves Reach $42.574bn

Naira Rallies to N1466/$ as Foreign Reserves Reach $42.574bn

Staying on track, the naira did not give up gaining momentum against the US dollar across the Nigerian Foreign Exchange Market (NFEM), details obtained from the daily FX update from the Apex Bank revealed. 

The Central Bank of Nigeria (CBN) data showed that the official rate appreciated against the US dollar for second days, touched an intraday low of N1463.5000 per dollar on Thursday.

Striking a balance between inflows and corporate demand, the FX spot rate settled at N1466 per dollar, gaining 27 basis points on the previous day.

Traders highlighted that a 0.27% appreciation was a result of healthy FX supply from exporters and international oil companies as well as hot money from foreign portfolio investors.

The CBN reported that the naira touched an intraday high of N1472 per dollar and closed the day at N1464, with the Nigerian Foreign Exchange Market (NFEM) rate settling at N1466.

“NFEM rate is derived at the volume weighted average and stands as the official exchange rate for the day,” the CBN said. In the parallel market, the naira appreciated to N1495 per dollar in the absence of US dollar demand pressures. 

Meanwhile, Nigeria’s gross external reserves sustained an uptrend, boosted by successive inflows from across sources. The nation’s foreign reserves rose to $42.574 billion from $42.353 billion at the end of last month amidst uncertainties in the global commodity market.

Global oil prices settled lower after Israel and the Palestinian militant group Hamas signed an agreement to cease fire in Gaza. Brent crude dipped $1.31, or 1.71%, to $65.12 a barrel, while U.S. WTI receded by $1.12, or 1.79%, to $61.43.

Similarly, gold prices fell below the $4,000/oz milestone breached for the first time in the previous session, as the dollar pushed higher and gold investors booked profits following a ceasefire deal between Israel and Hamas.

 Spot gold lost 0.87% to $3,976.69/oz, while U.S. gold futures dipped 0.96% to $3,991.57/oz. Commodities prices are expected to trade mixed tomorrow, with gold likely consolidating after its record run, while oil may face further pressure from fading geopolitical risk premiums.

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