Naira Rises as Against Dollar as IOCs Inflows Boost FX Liquidity
The naira strengthens against the US dollar across foreign exchange markets as inflows from international oil companies and foreign portfolio investors boost liquidity. Spot data from the FMDQ platform showed that the local currency appreciated by 0.96%, closing at N1,644.86 per US dollar in the official market.
The naira has been trading at N1600 ahead of the transition to an automated trading platform next week. The Central Bank of Nigeria sold $48 million to banks to boost liquidity at the autonomous FX market on Wednesday.
As the official rate appreciate, the spread on the US dollar widened as the spot rate at the parallel market remained under pressure. Despite season demand expectation, the naira exchange rate appreciated by N5 to close at N1,740 per US dollar in the parallel market.
Some analysts said this is partly due to remittance inflows from Nigerians in diaspora ahead of Yuletide. More US dollars and other foreign currency are finding their ways into the economy, analysts told MarketForces Africa, discussing exchange rate outlook from Dec.
In a note, AIICO Capital Limited told investors that the naira strengthened by 96 bps against the US dollar due to a rise in inflows from foreign portfolio investors and International Oil Companies (IOCs).
Analysts further explained that most of the transactions conducted at the Nigerian autonomous FX market occurred between N1617.02 and N1702.00, ultimately closing at ₦1,644.86 per dollar.
In the global commodities market, oil prices dipped as an unexpected increase in U.S. gasoline inventories raised concerns about demand during the Thanksgiving holiday.
Brent crude was priced at $72.79 per barrel with WTI around $68.71. Likewise, gold prices decreased due to a stronger U.S. dollar, as investors analyzed recent economic data indicating stalled inflation progress.
Analysts said this situation hints that the Federal Reserve may be cautious about implementing further interest rate cuts, with gold settling at approximately $2,627.60 per ounce. #Naira Rises as Against Dollar as IOCs Inflows Boost FX Liquidity Ghana to Import Petroleum from Dangote Refinery – Official
