Naira Rises as Foreign Reserves Approach $52 Billion
The Nigerian local currency, the naira, rose against the US dollar (USD) at the official window on Thursday as the nation’s foreign reserves continue to move towards $52 billion.
The local unit gained strength against the World’s dominant currency and other Western currencies on signs of improved FX liquidity at the Central Bank of Nigeria (CBN) window.
The sustained FX inflows from hydrocarbon receipts, remittances, and foreign portfolio investors continue to drive the nation’s gross external reserves uptrend. Market confidence remains strong, with renewed discussion on Broad Street about naira undervaluation.
MarketForces Africa reported that Apex Bank preferred slow naira appreciation as the authority mopped up dollars in the first half from the official window to curb naira gains.
The naira recorded a bullish Thursday, appreciating by 0.05% to close at ₦1,381.53/$ at the official Nigerian foreign exchange market (NFEM) window and strengthening by 0.36% in the parallel market to settle at ₦1,379/$.
Based on official data from the local forex market obtained by MarketForces Africa, the spot FX rate hovered between N1380 and N1383.5000 per dollar during Thursday’s trading session, amid a surge in interbank FX turnover and deal count.
Interbank FX activities at the NFEM window increased sharply on the day to $205.366 million, up by about 69% from $121.727 million reported the previous day.
The CBN data showed that the number of FX deals in the interbank market edged higher to 120, up from 150 the previous day.
Nigeria’s gross external reserves maintained an uptrend, settling at $51.893 billion from $51.867 billion the previous day, boosting FX market participants’ confidence about the CBN shock absorber capacity in case of an unusual occurrence. CBN Hikes Interest Rates on Treasury Bills, Allots N1.1trn
