Naira Rises by N33 to N1553 as FX Outflows Ease
The naira has extended its gaining streaks against the US dollar in the absence of FX pressures and substantial support from the Central Bank of Nigeria. Exchange rates improved by N33 in the shortened week to close at N1553 in the official window on Thursday, supported by foreign portfolio investors’ interest in OMO bill auctions and lower outflows.
Some analysts noted the absence of dividends upstream from multinational companies affected by the devaluation of the local currency has helped the rate stability. “Significant FX reduction from multinational dividend repatriation and improved balance of trade has helped the naira is the recovery process”, analysts said in a group chat with MarketForces Africa team.
The value of the local currency in relation to the US dollar increased by N12 to N1553.11 on Thursday, data obtained from the CBN platform revealed, from N1565.46 at the close of the trading session on Wednesday. The exchange rate has improved in favour of the Nigerian currency in the last four days, opening the week at N1586.15 per dollar versus a closing FX rate of N1533.
On the domestic front, Nigeria’s external position showed modest improvement, driven largely by a build-up in foreign reserves in May. Data from the CBN for May revealed that Nigeria’s gross external reserves rose by 1.4% month-on-month, closing the period at $38.5 billion.
The accumulation reflects improved crude oil receipts, moderated import demand, and possible inflows from multilateral sources. The performance of the Nigerian naira, however, was mixed across different segments of the foreign exchange market. At the official Nigerian Autonomous Foreign Exchange Market window, the naira appreciated slightly by 0.66% month-on-month, settling at N1,586.15 per U.S. dollar.
This marginal gain was supported by periodic central bank interventions and a modest improvement in FX liquidity. Conversely, in the parallel market, the currency depreciated by 1.4% to close at N1,615.00 per dollar, reflecting underlying pressure from speculative activity and persistent demand imbalances. Nigeria’s Banking Sector Stable, CBN Reassures Nigerians
