Naira Surges on Forex Market Supply Boost
The naira halted two days of depreciation on Wednesday, gaining 0.58% to ₦1,378.70/$ at the official window as foreign payment pressures eased from N1386 per dollar.
The spot rate appreciated as US dollar volume surged on Wednesday, with Nigerian Foreign Exchange market (NFEM) interbank turnover rising to N116.217 million from N30.953 million the previous day.
FX rate traded between N1,372 and N1,384.5000 during the intraday trading session, reflecting the absence of significant international payment pressures.
The Central Bank of Nigeria (CBN) continues to participate in the official window to keep the exchange rate stable. There have been forex market interventions, though volume sales appear to be maintenance rather than a significant move to redirect the rate.
Last week, the Apex Bank injected $95 million into authorised dealer banks’ vaults across two operations, though the naira is still close to negative.
Broadstreet maintains a positive outlook on the exchange rate, with most FX analysts citing a strong external buffer to support the local currency.
In the parallel market, the naira gained against the US dollar, settling at ₦1,400, reflecting broad-based buying interest in the local currency across both the official and informal foreign exchange segments.
Oil prices declined but remained elevated, with Brent hovering around $100 per barrel and US West Texas Intermediate at $96, reflecting supply risks.
The EU has warned that oil and gas prices will not go down any time soon, even if the Iran war ends, citing pressure on fuel supplies and tight global markets, as it prepares support measures for households and businesses.
Soaring oil and gas prices in Europe resulting from the ongoing war involving Iran will not return to normal levels any time soon, even if peace is declared tomorrow, the European Union’s energy commissioner warned on Tuesday.
Hopes of de-escalation in the Iran war are encouraging, but may be premature, as tensions remain high and shipping through Hormuz remains constrained. Oil prices are likely to follow a short-lived but sharp spike pattern rather than a sustained breakout, Julius Baer says in a research note.
It maintains a neutral view, as supply disruptions appear to be easing with alternative routes ramping up, including flows into the Red Sea, Gulf of Oman and the Mediterranean, and the Iran-safeguarded trade around Hormuz. GTCO Declares N11.76 as Final Dividend for 2025
