Naira Rises as CBN Influences Rates Direction with $107m
The naira gained across foreign exchange markets following the Central Bank of Nigeria (CBN) sustained its US dollar sales to authorized dealer banks. The local currency has continued to trade steady against the US dollar, British pound, and Euro, reflecting improved liquidity and foreign investors’ confidence.
International oil companies, exporters, non-bank corporates and inflows from individuals boosted the total US dollar volume available in the supply side. According to information obtained from the FMDQ platform, the spot FX rate appreciated by 0.15% to close at N1,501.42 per US dollar as supply surpassed demand on Tuesday.
Exchange rates strengthened against dominant foreign currencies in the official window, and the black market rate also appreciated due to strong FX inflows. Last Friday, the CBN intervened in the market, selling $39.85 million between the rates of N1,495.00/$1 and N1,515.00/$1 to authorized dealer banks.
The last intervention brought total FX sales for the week to $106.65 million, separate investment banking firms said. With sustained US dollar supply to Bureau de Change, BDCs, the naira also stands strong in the parallel market.
Analysts channel check revealed that the parallel market rate appreciated by 0.24% to settle at N1,497.11 per US dollar over reduced FX pressures and speculative activities. But a slew of analysts and economic experts think that the momentum will reduce as external reserves continue to fall.
The nation’s gross external reserves fell below $39 billion as the CBN aggressively supported the naira to remain stable. There is a mismatch; using a short-term approach to solving long-term problems isn’t best for the nation, analysts told MarketForces Africa.
Elsewhere, oil prices dropped over 2% to a two-month low following weak economic data from the U.S. and Germany, compounded by concerns over President Donald Trump’s tariff policies. Brent crude declined $1.61 (2.25%) to $73.17 per barrel on Tuesday, while U.S. West Texas Intermediate (WTI) fell $1.60 (2.3%) to $69.10.
Meanwhile, gold prices retreated as investors took profits after a record high, though trade war fears continued to drive safe-haven demand. Market report revealed that spot gold slipped 0.6% to $2,934.99 an ounce after peaking at $2,956.15.#Naira Rises as CBN Influences Rates Direction with $107m CBN Rejects N1.6trn from Investors, Cuts Treasury Bills Rates
