Naira Trades Sideways as Interbank FX Activities, Turnover Dip
- Exchange rate steadied around N1,320
- Interbank FX turnover declined 48%
- Spot FX rate touched N1,318 during trading session
- Nigeria’s external reserves top $54 billion
- Oil prices hover around $100 per barrel
- Naira gains N9 month-to-date
The naira traded sideways at the Nigerian foreign exchange market (NFEM) on Tuesday as financial institutions’ activities at the interbank window declined.
In its updated daily FX data, the Central Bank of Nigeria (CBN) quoted the NFEM rate for the day at N1320.2469 to the US dollar, from N1320.5574 at the previous close.
Transactions were consummated between N1318 and N1323 during the day at the interbank FX window. This suggests no significant pressure from eligible US dollar-backed payments.
At the NFEM window, total interbank FX turnover declined to $55.604 million spread across 58 deals, reflecting a sharp slowdown in market makers’ activities versus $107.069 million reported the previous day.
Specifically, interbank turnover declined by more than 48% on the day to $55.604 million from $107.069 million as demand for international payments dropped.
So far in Sept, the naira has gained N9 per dollar in the foreign exchange market amidst growing external reserves.
Latest data from the Central Bank showed that Nigeria’s gross external reserves topped $54 billion, covering 11 months of imports based on the country’s latest trade data.
The market anticipates elevated oil prices in the global commodity market to continue to enhance the external reserves balance, strengthening the CBN buffer to defend the naira.
Brent crude rose above $99 a barrel, reaching its highest level in nearly seven weeks and approaching the key $100 threshold after Iran said it had struck two American vessels and eight oil tankers in the Gulf.
The escalation heightened concerns over further disruptions to global oil supplies. Tehran also launched ballistic missiles toward Jordan and warned vessels in the Persian Gulf, urging tanker crews near Kuwaiti and Bahraini ports to “immediately abandon their vessels.”
The latest attacks followed US strikes on five Iranian tankers near Kharg Island, the Islamic Republic’s main oil export hub.
Elsewhere, Iran-backed Houthi militants targeted energy infrastructure in southern Saudi Arabia, including the 400,000-barrel-a-day Jazan refinery.
Meanwhile, stronger Chinese oil demand is lifting prices for African, Canadian, and Latin American crude as disruptions in the Strait of Hormuz push refiners to seek alternative supplies from more distant markets. Nigerian Naira Strengthens Against US Dollar, Touches N1302
