Naira Rises as Gross External Reserves Hits 3-Year High
The Nigerian naira rose against the U.S dollar in the foreign exchange (FX) market on Monday as gross external reserves balance hit 36-month high.
According to spot data on FMDQ platform, the naira appreciated by 14 basis points to close at N1,539.55 per US dollar at the Nigerian foreign exchange market.
The positive trend followed FX intervention sales conducted by the Central Bank (CBN), keeping exchange rate steady against the dominant U.S dollar.
The forex market showed a certain level of stability, with improved liquidity observed. Analysts said FX transactions were consummated between the range of N1,532.00 and N1,545.
Last week, the CBN sold $197.7 million to authorised dealer bank as part of effort to boost FX level in the supply side – the FX auctions sales spanned 4 out of 5 days’ activities in the financial market. Despite this, the naira lost N2 per greenback.
Latest data from the CBN showed that gross external reserves balance increased significantly as inflows from foreign portfolio investors continue to flood the Nigerian economy. Gross external reserves climbed to $40.816 billion, the level seen three years ago.
The CBN said in a report that Foreign exchange inflow through the economy increased by 3.01 per cent to US$22.89 billion, from US$22.22 billion in Q22024.
Foreign exchange outflow through the economy rose by 15.18 per cent to US$8.43 billion, relative to the level in Q22024.
Consequently, net foreign exchange inflow through the economy decreased by 2.97 per cent to US$14.46 billion, from US$14.89 billion in the preceding quarter.
In the global commodities market, oil prices declined due to concerns about a potential supply surplus next year and a stronger dollar, with trading activity being light ahead of the Christmas holiday.
Brent crude was valued at roughly $72.03 per barrel, while WTI was approximately $68.66. Likewise, gold prices fell in quiet holiday-season trading on Monday, impacted by a strong dollar and elevated U.S. Treasury yields as investors anticipated more apparent indications regarding the Federal Reserve’s monetary policy for 2025. It traded around $2,612.58 per ounce. #Naira Rises as Gross External Reserves Hits 3-Year High#
