Naira Rises as External Reserves Pick Up Again
The Nigerian local currency, the naira, experienced a soft rally against the US dollar in the official foreign exchange market as data showed that gross external reserves picked up this week.
At the Nigerian foreign exchange market (NFEM), the naira appreciated by 0.01% to close at ₦1,599.71 per dollar as successive FX intervention sales by the Central Bank bolstered the supply side.
MarketForces Africa reported that the CBN has sold more than $1.3 billion in an aggressive mood to authorised dealer banks to ensure the exchange rate traded within the target range. The amount of FX pumped out is about twice the amount sold to defend the local currency in March.
An update on the Central Bank platform showed that Nigeria received fresh inflows from offshore, which bolstered the external reserves balance. An inflow totaling $41.532 million was received into CBN external reserves on Monday, lifting the balance in the foreign reserves to $37.839 billion.
In two successive primary market auctions, the monetary authority has offered higher rates on OMO bills to attract hot money into the economy. The CBN kept spot rates attractive amidst efforts to halt the recent outflow of funds from the Nigerian market—primarily due to a shift in global investment sentiment.
Analysts said the monetary authority will likely keep the benchmark interest rate at 27.50% to avoid capital outflows from the Nigerian market should the yield on naira assets become unattractive.
Last week, inflows into the Nigerian autonomous foreign exchange market fell by more than 93% week on week to US$735 million from US$1.42 billion in the previous week.
The breakdown showed that the CBN accounted for 33.47% of the total inflow, foreign portfolio investors contributed 11.99%, non-bank corporates supplied 31.76%, and exporters did 21.17%, while other sources accounted for 1.61%.
Elsewhere, oil prices fell by about 3% to a two-week low on Tuesday amid expectations of OPEC+ production increases and concerns that U.S. President Donald Trump’s tariffs could harm global economic growth and reduce fuel demand.
Brent crude futures declined by $1.70 (2.6%) to $64.16 per barrel, while U.S. West Texas Intermediate fell $1.55 (2.5%) to $60.50.
Gold prices also fell nearly 1% as easing U.S.-China trade tensions reduced safe-haven demand, with investors awaiting economic data to assess the Federal Reserve’s policy direction. Spot gold dipped to $3,314.26 per ounce, and U.S. gold futures slid 0.7% to $3,325. #Naira Rises as External Reserves Pick Up Again Naira Appreciates as CBN Sells Additional Dollars in FX Market
