Naira Sees Soft Rally as Interbank FX Activities Slow
The naira strengthened slightly in the foreign exchange (forex) market as FX supply outpaced international payments logged on Thursday.
Trading data released by the Central Bank of Nigeria (CBN) showed that the local unit gained 0.07% against the US dollar at the official window, closing at N1,331.6139 from N1332.5893 the previous day.
The spot FX rates hovered between N1327 and N1333.5000 at the Nigerian Foreign Exchange Market (NFEM) during Thursday’s intraday trading session.
FX liquidity climbed as foreign portfolio investors drove momentum, while non-bank corporates enhanced the supply side, along with hard currency flows from exporters & importer sources.
Interbank FX turnover reduced by approximately 60% to $201.562 million, according to a CBN report, from $490.855 million the previous day.
The market experienced a sharp slowdown in financial institution activity at the NFEW window; both US dollar volume and deal count declined. The number of deals at the interbank window reduced to 128, the CBN report revealed, from 179 on Wednesday.
The naira also gained 0.07% against the pound to N1,764.26/£ and against the euro to N1,490.48/€ at the official window.
In the parallel market, the dollar fell 0.29% to N1,370.00, the pound fell 0.55% to N1,810.00 and the euro fell 0.33% to N1,505.00. The gap between the two markets narrowed to 2.88% from 3.11%. Year-to-date, the dollar is down 7.25% against the Naira at the NFEM window.
The exchange rate is expected to stay stable at the official window, with the parallel gap staying below 3%. Oil above US$100 should keep dollar supply steady and support the Naira, according to AIICO Capital Limited. Fitch Revises Nigeria’s Outlook to Positive, Anticipates Tinubu 2027 Election Win
