Naira Reclaims Value on Fresh Accretion into FX Reserves
Nigeria’s local currency, the naira, struggled to claw back a small gain of about 2% in the official window as demand for US dollar slowdown ahead of workers day celebration.
According to information obtained from FMDQ Securities Exchange platform, the Naira experienced a 1.98% appreciation against the US dollar, spot rate settled at ₦1,390.96. The local currency has come under pressures after topping the global currency performance in April.
The naira beat all African currency due to latest FX reforms in the market. The apex bank reform not only boost market confidence, it also attracted FX inflows.
But the momentum was short lived due to FX liquidity squeeze in the official and informal markets. The shock caused FX gains reversal over a week while the monetary authority watch helplessly.
In the parallel market, the US dollar was sold at ₦1,340, clawing back previous losses. Nigeria’s gross external reserves climbed further this week, closing the month of April at $32.232 billion.
Foreign exchange reserves switched higher after the Central Bank of Nigeria (CBN) denied using part of the amount in the account to defend the local currency.
The nation’s external reserves made uptrend despite bearish trade condition in the global commodity market on the back of ceasefire hope between Israel and Hamas.
Oil prices experienced a decline, with the Brent crude falling by 1.94% to trade at $85.51 per barrel, and the West Texas Intermediate (WTI) crude oil also decreasing by 2.00% to trade at $81.07 per barrel. #Naira Reclaims Value on Fresh Accretion into FX Reserves
