Naira Rises to N1452/$ as Foreign Investors Top FX Supply
The naira (NGN) appreciated to N1452 per US dollar (USD) at the Nigerian Foreign Exchange Market (NFEM), with data showing that offshore investors’ inflows strengthen the supply side.
Updated data from the Central Bank of Nigeria (CBN) showed that the spot rate closed stronger after brushing an intraday high of N1457 per greenback.
Reflecting absence of significant pressure from US dollar demand, some international transacted closed at lowest intraday rate settled at N1450.
Foreign portfolio investors and exporters inflows lifted US dollar volume at the official window in addition to supply by non-bank corporate and individuals.
In its market update, Coronation Merchant Bank Limited revealed that foreign exchange inflows through the Nigerian Foreign Exchange Market improved to US$1.37 billion last week.
This suggests FX inflows in the official window increased by 25% week on week on from US$1.10 billion in the prior week. Foreign portfolio investors (FPIs) remained the dominant source, according to Coronation Research, contributing 33.52% (US$460.01mn) of total inflows, followed by exporters (14.92%), Non-Bank Corporates (10.76%), CBN (6.63%), and other sources (28.58%).
Looking ahead, the official rate is likely to remain below the N1,500/US threshold, anchored on expectations of sustained FX liquidity, Coronation said in its commentary note.
Last week, the Naira traded mixed during the week, as the official exchange rate appreciated by 1.19% week on week, or N17.39 to close at N1,457.96/US$1.
Crude oil prices climbed sharply, with benchmarks such as Brent crude posting gains of more than 7% for the week. The rally was driven in large part by the Trump administration’s newly announced sanctions on Russia’s top oil producers, Rosneft and Lukoil.
These firms together account for about 5% of global oil output, raising concerns that their exclusion could tighten supply.
At the same time, positive developments on the trade front, including confirmation that President Trump will meet President Xi Jinping soon, helped calm investor fears over global growth and supported the positive sentiment, adding further fuel to the oil rally. Dangote Cement Jumps by 11%, Reaches Highest Value in 52 Weeks
