Naira Sees Market Wide Gains, FX Spread Falls to N26
The naira has fun with the United States (U.S.) dollar across the foreign exchange markets, thanks to FX interventions, and foreign investors heightened confidence on Nigerian economy.
Today, the naira registered an additional gain against the U.S. dollar in the foreign exchange market amidst sufficient FX liquidity in the official window. According to FMDQ spot FX data, the local currency appreciated by 0.05% in the official window, closing at ₦1,509.53 per US dollar from N1,510.33.
The latest recovery in money pricing is bolstered by sustained intervention by the Central Bank of Nigeria (CBN). The authority has maintained FX auction sales to banks to keep the supply side stronger amidst rising US dollar demand.
The Apex Bank intervened in the FX market at the beginning of the week, selling $55.80 million within the range of $/₦1,504.00 to $/₦1,510.50. To achieve all round stability, the CBN directed Bureau de Change (BDCs) to purchase $25,000 from authorised dealer banks to meet invisible demand.
The CBN continues to keep its eyes on the activities at the parallel and official FX markets to achieve exchange rates convergence, which some analysts view as the essence of Nigeria’s FX reform.
The exchange rate at the parallel market rate rose by 0.65% to N1,535, CardinalStone Limited said in its update, on the back of steady FX inflows supply at official rate. This has reduced the gap between official and parallel market rates to N26 on dollar.
Oil prices remained near a one-week high due to concerns over supply disruptions in Russia and the U.S., while investors awaited clarity on potential sanctions as Washington worked toward a resolution of the Ukraine conflict.
Brent crude edged up 16 cents to $76.00 per barrel, while WTI gained 36 cents to $72.21.
Meanwhile, gold prices declined after reaching a record high earlier, pressured by a stronger dollar and uncertainty over Trump’s latest tariff threats. Spot gold fell 0.5% to $2,920.74 per ounce, after peaking at $2,946.85.
Analysts expect ongoing volatility as Trump’s tariffs may pressure oil prices by increasing consumer costs, slowing the global economy, and curbing fuel demand. Concerns over European and Chinese demand are also limiting price gains. #Naira Sees Market Wide Gains, FX Spread Falls to N26 Bonds Yield Falls to 20% as Market Reacts to Inflation
