Naira Softens over Sustained FX Liquidity Tightening
The naira softened against the US dollar at the official window as the market continues to grapple with tight FX inflows in the official window.
International payments eclipsed the US dollar volume level amidst sustained intervention by the Apex Bank which keeps the naira’s exchange rate outlook positive.
The Central Bank daily FX update released today highlighted that the naira fell by 3 basis points as foreign portfolio investors, exporters and non-bank corporate contributions continue to drag.
The naira weakened to N1,455.50 per dollar at the CBN FX window. In the parallel market, the exchange rate improved by 0.14% to N1,471/$ in the parallel market, reflecting differing currency pressures between the regulated official segment and the informal foreign exchange market.
Hence, the spread in the currency markets collapsed further to N16, raising hope about potential exchange rate convergence as remittances continue to enhance dollar supply at the informal segment.
Nigeria’s foreign reserves was last reported at US$45.4 billion, declining by -0.30% or US$148.41 million. Analysts at Anchoria Securities Limited said the sustained elevated level is expected to hold firm in the near term.
This, according to analysts, is supported by stronger foreign inflows driven by higher oil receipts, improved FPI participation, and consistent CBN FX management.
Global oil prices fell below $60 a barrel on, the lowest since May, as prospects for a Russia-Ukraine peace deal appeared to strengthen, raising expectations sanctions could be eased.
Brent crude dipped 151 cents, or 2.49%, to $59.05 per barrel, while U.S. West Texas Intermediate (WTI) receded by 128cents, or 2.26%, to $55.39.
In contrast, Gold rose after a U.S. jobs report showed the unemployment rate rose last month from September, reinforcing bets of rate cuts by the U.S. Federal Reserve and sending the dollar index lower.
Spot gold rose marginally by 0.08% to $4,306.22/oz, while U.S. gold futures inched up by 0.01% to $4,335.45/oz. Analysts expect markets to remain cautious to bearish, with oil prices supported by continued geopolitical concerns. AIICO Insurance Sets N5.1bn Profit Target for Q1-2026
