Naira Softens Against Dollar, Nigeria’s FX Reserves Top $50bn
The naira softened against the US dollar as international payments outweighed FX liquidity at the Nigeria Foreign Exchange Market (NFEM) on Friday, according to an official report from the authority.
The Central Bank of Nigeria (CBN) indicates in its daily FX update that the spot rate closed at N1362.2123 per dollar traded at the official window, from N1358.7478 the previous day.
The naira entered low gear against the stronger, dominant US dollar amid a sharp reduction in interbank FX turnover at the NFEM window on Friday.
The CBN FX update revealed that the naira hovered between N1360 and N1366 per dollar, reflecting FX liquidity constraints that weakened the official rate.
Interbank FX turnover declined by more than 37% over the last 24 hours to $73.565 million across 90 deals, from $128.171 million on record the previous day.
The US dollar aggregate supply was limited in the absence of significant offshore investors’ participation in the money market, which apparently reduced demand for the naira amid the absence of multiple OMO bill auctions.
Still, Nigeria recorded additional inflows from oil receipts and other sources, including remittances in the CBN vaults. Gross external reserves surged above $50 billion on Thursday, according to movement in foreign reserves data accessed by MarketForces Africa today.
The amount is the highest on record since FX reform, and some economists and market analysts told MarketForces Africa in a chat that without significant debt service payments in the first half, FX reserves could hit $51 billion in June. Central Bank of Nigeria Hikes Interest Rates on Treasury Bills
