Naira Strengthens on FX Intervention, Dealing Banks Get $190m
The Nigerian naira rose against the US dollar in the official window as the Central Bank strengthened market supply with FX intervention sales to authorised dealer deposit money banks.
The exchange rate closed at N1580 in the official window of the Central Bank of Nigeria in an all-week positive movement supported by sufficient dollar supply. Hence, the naira appreciated by 1.14% to close at N1,580.44 per dollar amid improved supply and steady market activity.
Early in the week, the CBN intervened with a total of $190.4 million, Lagos-based investment firm AIICO Capital Limited said in its update. The FX intervention sales to banks supported liquidity and caused the exchange rate to appreciate in the absence of significant US dollar demand.
NAFEX fixing rate rose from N1,602.38 to N1,589.73 midweek and further to N1,580.44 by Friday, the firm said. Transactions at the forex market were conducted between N1,575 and N1,610 across sessions, with notable bids and offers across the N1,580–1,587 band.
FX market data highlighted that foreign investor flows buoyed midweek activity, while exporters added supply later in the week. Last week, the gross external reserves rose by $182.79 million to $38.56 billion, according to CBN data, following successive records of inflows from unidentified sources.
A slew of analysts maintained that the naira exchange rate at the official window is expected to remain stable around current levels, supported by CBN interventions. In the forwards market, the naira rates appreciated across contracts, as the market reacted to the apex bank FX swaps last week.
According to Cordros Capital Limited, the 1-month FX forward contract appreciated by +1.1% to N1,623.11 per US dollar. The 3-month FX forward contract rose by +1.5% to N1,682.77 at the close of the trading session on Friday.
At the same time, the 6-month FX forward contract climbed by +1.6% to N1,770.17, and the 1-year contract edged higher by +2.6% to N1,938.74 per dollar deal.
“The naira is likely to stay stable in the short term, as global pressure remains contained amid easing trade tensions. However, any substantial appreciation appears unlikely, with FX liquidity still constrained by subdued foreign portfolio inflows amid persistent global uncertainty”, analysts stated.
In the global commodity market, oil prices rose on Friday as U.S. traders adjusted positions ahead of the Memorial Day weekend, while uncertainty surrounding nuclear negotiations between the U.S. and Iran added to market jitters.
Brent crude ended the session at $64.78 per barrel, up 34 cents or 0.54%, and U.S. West Texas Intermediate settled at $61.53, gaining 33 cents or 0.54%. Gold prices surged over 2%, marking their best week in six, driven by renewed U.S. tariff threats and a weaker dollar.
Data showed that spot gold climbed 2.1% to $3,362.70 an ounce, bringing weekly gains to 5.1% and reaching its highest level in more than two weeks. #Naira Strengthens on FX Intervention, Dealing Banks Get $190m#
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