Naira Swings Narrow Exchange Rate Gap Across FX Markets
The FX spread, or the exchange rate gap between the naira spot rates in the official and informal segments of the Nigerian currency markets, narrowed amid Naira swings.
The naira closed stronger at the official window as FX liquidity improved, while the parallel market also saw mild appreciation against the dollar as demand for foreign payments eased.
In the Nigerian foreign exchange market, the spot FX rate rose to ₦1,370 per dollar from ₦1,380 the previous week, while the parallel market rate rose to ₦1,390, gaining ₦15 per dollar traded week-on-week.
The exchange rate movement across the official and parallel markets narrowed the FX spread to ₦20 per dollar from ₦25, reflecting improved convergence between the two markets.
Market dynamics remain positive, with growing external reserves and popping FX inflows at the official window, driven by activity from foreign portfolio investors, exporters, non-bank corporates, and others.
Updated data from the Central Bank of Nigeria (CBN) showed that the country’s gross external reserves ended the week at $51.46 billion following successive FX inflows from across multiple sources.
The market anticipates foreign reserves to continue increasing amid reduced FX interventions by the authority at the official window. In the global commodity market, pressure on crude oil continues to ease amid extended negotiations between the US and Iran.
Oil prices fell, with Brent trading at $71 per barrel and WTI closing at $67 on Friday. All precious and industrial metals were mixed this week, as gold, silver and platinum advanced after weaker-than-expected U.S. jobs data boosted expectations of Federal Reserve rate cuts,
While tin and zinc gained on resilient industrial demand, lead and aluminium, however, declined on profit-taking and ample supply. #Naira Swings Narrow Exchange Rate Gap Across FX Markets
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