Naira Rises as CBN Sells US Dollar to Currency Traders
The naira strengthened against the US dollar across foreign exchange markets on Friday as the Central Bank of Nigeria (CBN) sold FX to Bureau de Change (BDC) operators.
The naira appreciated, gaining 2.81% against the US dollar in the official market, closing at ₦1,593.32 per US dollar. The local currency rallied as market anticipates FX auction sales for September to boost the supply.
Despite FX auction sales at the informal currency market, the naira plunged. The local currency depreciated as demand pressure persisted in the parallel market. The black market exchange rate declined by 1.23%, sliding to ₦1,645 per dollar, according to a channel check.
The CBN sold $400 million to BDCs as part of effort to stop negative tide against the local currency. In a statement, the apex said it has approved $20,000 each to BDCs operators at the rate of N1580 per US dollar.
The CBN said all the eligible BDCS must not sell to end users beyond 1% spread per dollar. Exchange rate at the parallel market has worsened. Analysts said the CBN has formed the habit of coming to market when the naira has reached highest boiling points.
Ahead of next week trading, analysts said the naira would halt persistent depreciation at the informal market due to latest FX auction.
In the global commodity market, oil prices showed a negative trend, with Brent Crude trading at $72.26 per barrel and WTI at $68.88 per barrel on Friday. The CBN is using FX auction to BDCs to set ceiling for traders despite inconsistence.
In August, the naira traded in the mixed zone in reaction to the mixed dynamics impacting the demand and supply of liquidity by the apex bank into the market, according to Cowry Asset Limited.
Thus, the naira edged the united states dollar by 0.64% month on month to close at N1,598.56 at the Nigerian autonomous foreign exchange window and then depreciated by 1.54% month on month to N1,620 from N1,595/$1 at the parallel market.
Last month. Nigeria’s Bonny Light price movement was muted month-on-month, settling at $84.28 per barrel, reflecting a slight decline from $84.28 per barrel at the end of July 2024.
Nigeria’s foreign exchange reserves recorded a marginal dip of 1.33% month on month to close at $36.31 billion from July’s $36.80 billion and was attributed to the CBN’s involvement in the FX market in an effort to stabilise the naira. Naira Rises against US Dollar Ahead of Sept. FX Auction
