Naira Value Improves on FX Inflow, External Reserves Boost
The naira reclaimed additional value against the US dollar at the Nigeria Foreign Exchange Market (NFEM), the official FX spot platform of the Central Bank, supported by offshore inflow. At the same time, the gross external reserves balance continues to rise with the latest round of inflows from various sources.
The interbank market remained liquid, driven largely by inflows from Foreign Portfolio Investors (FPIs), AIICO Capital Limited said in its investor note. The external market sentiment improved as Nigeria successfully settled its $3.4 billion debt obligation to the International Monetary Fund, according to an official report confirmed by the multilateral lender.
The economy has recently received a sequence of funds from foreign portfolio investors seeking to bet on OMO bills, and analysts anticipate that more hard currency will flow in due to a number of OMO bills approaching maturities.
CBN FX spot data showed that the Naira recorded a slight gain, appreciated by 3 bps to close at N1,600.0307 per US dollar on Tuesday close.
Transactions during the session stayed within a tight band of N1,597 to N1,610.50 as analysts anticipate the exchange rate will maintain its present trading band. The exchange rate at the parallel market remained flat at N1,635.
In the global commodity market, crude oil prices rose sharply on Tuesday, gaining over $1.60 per barrel, supported by a temporary reduction in U.S.-China tariffs and an encouraging U.S. inflation report.
Brent crude settled at $66.63, up $1.67 or 2.57%, while U.S. West Texas Intermediate (WTI) crude ended at $63.67, rising $1.72 or 2.78%. Meanwhile, gold prices edged higher after heavy losses the day before, as investors sought bargains and reacted to softer-than-expected U.S. inflation data.
Spot gold was up 0.4% to $3,246.95 an ounce, recovering from Monday’s low of $3,207.30, signaling renewed interest in the precious metal. Market analysts said a bullish bias is expected to persist in oil markets, with the latest inflation moderation providing fundamental support. Nigeria Eurobonds Yield Rises Amidst Rates Decisions
