Naira Rises on FX Supply Boost, Foreign Reserves Hit $44.67bn
The naira rose against the US dollar at the Nigerian foreign exchange market (NFEM) on Tuesday as demand and supply pressures eased following $186.6 billion in FX supply by the Apex Bank last week.
The spot fx rate appreciated by 0.21% to ₦1,445.39/$ at the official window and strengthened significantly by 1.12% to ₦1,458/$ in the parallel market.
The exchange rates direction reflect improved currency sentiment and reduced pressure across both the regulated official segment and the informal foreign exchange market.
The Central Bank of Nigeria (CBN) fx update showed that the naira touched an intraday high of N1450.5000, signalling reduced pressures in the currency market, from N1452 the previous day.
Fx transaction was also consummated at an intraday low of N1443, as against N1445 per dollar quoted the previous day. Investment firms reported that US dollar volume increased as foreign portfolio investors boosted the supply side. In addition, the market expects sustained FX interventions to keep the naira stable at the official window.
On average, the naira is expected to settle near N1500 per dollar, an outlook which is significantly supported by an expectation that the CBN will continue to support the local currency.
With fluctuation in the prices of crude oil, Nigeria’s gross external reserves increased to $44.668 billion as of November, the latest update from the CBN revealed.
Recall that Yemi Cardoso, the CBN governor, told a forum in November that external reserves has surpassed $46.7 billion, covering 11 months of imports based on Nigeria’s most recent trade data.
