Naira Rises as CBN Sells $146mn to Banks in 2-Day
The naira rose against the US dollar in the foreign exchange market as demand pressures eased after two days of FX intervention by the Central Bank. The local currency strengthened as US dollar volume available in the official market outweighed daily demand logged for foreign payments.
Spot FX data obtained from the FMDQ platform revealed that the naira depreciated by 0.06% in the official window, closing at N1,548.47 per dollar. Analysts at AIICO Capital Limited reported that transactions executed within N1,500.00 and N1,570 per greenback. Conversely, the exchange rate appreciated by 0.18% in the parallel market, ending the day at N1,660 per US dollar due to improved FX supply.
FX Interventions
The Central Bank of Nigeria (CBN) remained active in the foreign exchange market this week, selling a total of $146.1 million to authorised dealer banks to boost liquidity in the FX market.
On Tuesday, the CBN intervened in the forex market, selling $98.75 million to banks between the rate of N1,545 – N1,553 per US dollar. Also on Wednesday, the Apex Bank intervened in the forex market again as demand pressures persisted, selling $47.35 million to banks between the rate of N1,545 – N1,560.
External Reserves
Nigeria’s gross external reserves declined sixth times since last week as demand for international payments materialised. Data from the CBN revealed that external reserves printed lower at $40.422 billion on Wednesday. The nation’s foreign reserves had climbed to $49.20 billion before pressures from FX payments reduced it.
Commodity Market
Elsewhere, oil prices experienced a decline after reaching multi-month highs a day prior, influenced by U.S. President Joe Biden’s recent sanctions against Russia and a larger-than-expected decrease in U.S. crude oil inventories.
Brent crude was priced at $81.29 per barrel, while U.S. West Texas Intermediate (WTI) settled at about $78.68 per barrel on Thursday. In contrast, gold prices increased to a level not seen in over a month, following recent U.S. economic data that put downward pressure on Treasury yields.
This shift was prompted by a softer reading of core inflation this week, which heightened expectations for a more accommodating monetary policy from the Federal Reserve. Gold was trading at around $2,718.00 per ounce. $Naira Rises as CBN Sells $146mn to Banks in 2-Day FG Commissions Two 63MVA, 132/33KV Mobile Substations
