Naira Skids Across FX Markets as CBN Intervention Slows
The naira plunged across foreign exchange markets as Central Bank of Nigeria (CBN) FX intervention slowed down. The spot FX rate has been declining this week in the absence of FX sales to banks. The volume of US dollars available on the supply side eased as the CBN began FX auction holidays.
Analysts observed that the fast and furious FX sales to authorised dealer banks have been put on hold by the Apex Bank despite rising gross balance in the nation’s external reserves, which has surged near $41 billion this week,
Despite a decline in the value of the naira, analysts said the market remained fully active as suppliers sought to sell their proceeds at better prices. Transactions took place within the range of N1,535 to N1,551 per US dollar, AIICO Capital Limited told investors in its market update.
Ultimately, the Nigerian Foreign Exchange market closed at N1,541.0559, reflecting a depreciation of 11 bps compared to the previous day. The naira is projected to stabilise on expectation of better inflows from various sources while the market anticipates CBN FX sales to banks in the coming days.
Investment banking firm CardinalStone Securities Limited said currency movement, which has contributed about 20.0%–30.0% to inflation in the last few years, is likely to be relatively stable in 2025.
Analysts expect the introduction of the electronic matching FX market system, increasing foreign portfolio inflows, greater access to dollar-denominated debt, rising FX reserves, and a positive current account balance to support the naira in 2025.
“Our weighted blended currency valuation places the naira’s fair value at approximately N1,720.88/$ for 2025,” CardinalStone said in its outlook for the year. The exchange rate worsened in the parallel market, losing N20 to close at N1,660 per dollar as a result of renewed demand pressures.
Elsewhere, Oil prices increased slightly as investors considered strong expectations for winter fuel demand despite the presence of large U.S. fuel stockpiles and ongoing macroeconomic worries.
Brent crude was quoted at $76.56 per barrel, while WTI hovered around $73.64. In a similar fashion, gold prices fell due to profit-taking after reaching a near four-week high in the previous session, with attention now shifting to the jobs report set to be released on Friday for insights into the Federal Reserve’s interest rate strategy for 2025. It traded at about $2,659.62 per ounce. #Naira Skids Across FX Markets as CBN Intervention Slows Abuja Chamber of Commerce Raises Concern over Rising Food prices
