Naira Volatility Eased on CBN Successive Appearances in FX Market
The naira exchange rate volatility eased as the Central Bank of Nigeria (CBN) sustained its aggressive forex market interventions. Spot FX data revealed that the naira strengthened by N3.99 against the US dollar in the official window to close at N1,548.59 as liquidity improved.
Intraday transactions were consummated between N1,548 and N1,558 per greenback, according to FX traders amidst sustained intervention. The CBN has continued to make daily appearances in the forex market to defend the local currency, though its series of FX auctions have started to impart the gross balance in the foreign reserves.
In its market report, TrustBanc Financial Group Limited told investors that the Apex Bank intervened for the seventh consecutive session yesterday, selling $27.5 million to banks between the rate of N1,550 – N1,553.5.
The authority has returned to aggressive FX auctions to stem the tide against the local currency. In December, the CBN series of FX interventions bolstered the US dollar supply volume and caused the naira to reclaim more than 8% in value against the greenback.
At the informal currency market, the exchange rate was flattish at N1,660 per US dollar as banks began to offer personal and business travel allowances to customers. At the last check conducted by MarketForces Africa yesterday, the gross balance in Nigeria’s foreign reserves declined to $40.035 billion from a 3-year level of $40.92 billion.
Elsewhere, oil prices declined by over 1%, prompted by U.S. President Donald Trump’s call for Saudi Arabia and OPEC to reduce costs during his speech at the World Economic Forum. Brent crude was trading at $78.10 per barrel, while West Texas Intermediate (WTI) was around $74.44.
In a similar vein, gold prices softened as the dollar gained ground, consolidating after reaching a more than three-month high in the previous session. The market remained attentive to Trump’s policies, with gold valued at about $2,752.48 per ounce.
Analysts said they expect that uncertainty over how proposed tariffs and energy policies will affect global economic growth and energy demand will continue to weigh on prices. #Naira Volatility Eased on CBN Successive Appearance in FX Market Ministry Seeks $2 billion Fibre Optics Funding
