Naira Rises Against Dollar as External Reserves Hits $40.292bn
The naira appreciated against the US dollar at the Nigerian Foreign Exchange Market (NFEM) in the absence of significant demand for foreign currency. Spot rate data obtained from the Central Bank of Nigeria (CBN) FX update platform showed that the naira closed at N1534.82, more than N2 gain from N1537.09 quoted for the previous day.
Pressure at the official FX market eased sharply. Intraday FX data showed that the naira touched an intraday high of N1536.50, compared with an intraday high of N1543 on the previous day.
The market witnessed a slowdown in the forex market amidst increased exporter inflows and rising external reserves. The nation’s external reserves increased to $40.292 billion amidst growing oil production output. The positive signals in the forex market boosted investors’ confidence, keeping the outlook on the naira exchange rate skewed to the upside.
In the parallel market, the naira was quoted at ₦1,550 per dollar, widening the gap between the official and parallel market rate to N15.18 on Wednesday. The spot rates had converged around N1535 before the latest divergence formed.
Global oil prices fell sharply after U.S. crude supply rose unexpectedly, though losses were limited after the U.S. Treasury Secretary indicated that President Donald Trump could leverage sanctions during a meeting with Russian President Putin.
Brent crude slipped 61 cents to $66.51 per barrel, while U.S. WTI dropped 68 cents to $62.49.
Meanwhile, gold prices rose on the back of a weaker dollar and falling Treasury yields, as mild U.S. inflation data reinforced expectations for a Federal Reserve rate cut in September and increased bets on additional easing later in the year.
Spot gold gained 0.18% to $3,353.95/oz, while U.S. gold futures settled $2.10 higher at $3,403.52. Commodity prices to trade in line with the expectation of other key economic data due this week. #Naira Rises Against Dollar as External Reserves Hits $40.292bn Sterling Strengthens after U.S Inflation, UK Job Data
