Naira Sees Small Gain as CBN Sells Additional Dollar in FX Market
The naira saw a small gain against the US dollar in the foreign exchange (FX) market as the Central Bank of Nigeria (CBN) intervened again, selling an additional $149.4 million to authorised dealer banks to stem negative exchange rate movement.
Demand for the US dollar by offshore investors exiting the financial market continues to rise while the Apex Bank signals readiness to bolster foreign currency liquidity in the official window.
To help alleviate this, the CBN intervened in the Nigerian autonomous forex market, selling $101.2 million at rates between $/N1,603.15 and $/N1,615.00, and an additional $48.2 million between $/N1,603.11 and $/N1,620.
This is in addition to $124 million sold by the monetary authority at the beginning of the week as the market continues to react to uncertainties in the oil market and higher tariffs on Nigerian exports.
FX analysts reported that the US dollar-Naira pair traded within a range of $/N1,589 to $/N1,634, with the Naira recording a slight appreciation of 4 bps to close at $/N1,611.5535. The CBN is expected to continue stepping in to stabilize the market, even as heightened risk aversion drives offshore investors to sell more, analysts said.
In the global commodity market, oil prices dropped over $1 a barrel on Tuesday, hitting four-year lows as persistent recession fears tied to the escalating U.S.-China trade war outweighed gains in the stock market.
Brent crude fell $1.47, or 2.29%, to $62.74 per barrel, while U.S. West Texas Intermediate (WTI) crude declined $1.26, or 2.08%, to $59.44. Meanwhile, gold prices rebounded above $3,000 an ounce, supported by a weakening U.S. dollar and rising trade tensions between the two largest global economies.
Spot gold rose 0.8% to $3,007.69 by late morning, recovering from a three-week low seen on Monday. U.S. gold futures also climbed 1.6% to $3,021.90, continuing to attract safe-haven investors amid ongoing market uncertainty. Naira Sees Small Gain as CBN Sells Additional Dollar in FX Market Money Market Rates Steady Amidst Widening Banking Deficit
