Naira Sees Soft Rebound as FX Liquidity Remains Tight
The naira experienced a soft value recovery against the US dollar at the official window, with the Central Bank of Nigeria (CBN) data showing external reserves rose on Monday.
The naira rally was soft, while trading activities at the unofficial market was relatively quiet as the market anticipates the CBN to boost the supply side.
The local currency has depreciated markedly in November from its strong positon of N1426 to N1448 at the official window despite FX interventions.
Though the pressure persisted as the spot FX rate touched an intraday high of N1459, a significant decline when compared with N1450 quoted the previous day. Meanwhile, some FX transactions were closed at an intraday low of N1440, the same as previously.
This FX trading pattern suggests the CBN pumped US dollars into the official market to stem the negative tides, seeing that the spot rate has almost gone out of the range.
The Nigerian forex market closed with a spot rate of N1447.35 per dollar, representing a 4 basis point exchange rate gain from N1448.03 the previous day. Conversely, the parallel market remained unchanged, with the naira closing at ₦1,470/$.
Nigeria’s external reserves balance climbed to $43.971 billion on Monday, according to data updated by the Central Bank, up from $43.64 billion.
Oil prices rose on Tuesday in a choppy session as traders weighed the impact of Western sanctions on Russian oil flows, as well as U.S. President Donald Trump saying his administration had started interviewing for the next Federal Reserve chairman.
Brent crude rose by 67cents, or 1.04%, to $64.87 per barrel, while U.S. West Texas Intermediate (WTI) ticked up by 88cent, or 1.47%, to $60.74.
Similarly, gold prices rose from a one-week low, supported by soft U.S. employment numbers, while investors assessed the likelihood of a Federal Reserve interest rate cut in December ahead of more delayed U.S. data releases this week.
Spot gold rose 0.81% to $4,077.57/oz, while U.S. gold futures increased by 0.04% to $4,075.96/oz.
Analysts expect commodities to face continued headwinds — oil could remain pressured as Russian loadings resume and sanction risks linger, while gold may struggle amid a firm dollar and fading hopes for a near-term Fed rate cut.
# Naira Sees Soft Rebound as FX Liquidity Remains Tight Dangote, BUA Drag Total Value of Cement Stocks Down by N1.47trn
