Nigerian Naira Climbs as CBN Sells U.S. Dollar to Banks
The naira climbed slightly as the Central Bank of Nigeria (CBN) sold US dollars to eligible deposit money banks (DMBs) to support the liquidity level in the foreign exchange market on Thursday.
The official spot FX rate appreciated to ₦1,328.2154/US$ at the Nigerian Foreign Exchange Market (NFEM) window, compared with ₦1,329.2129/US$ in the previous session.
The local unit rally was supported by the Apex Bank FX intervention, totalling $151 million, which was sold to financial institutions after the naira fell by N9. Transactions were consummated between N1322.7100 and N1333 per US dollar at the official foreign exchange market.
According to data released by the CBN, financial institutions’ activity as market makers increased sharply on Thursday, with interbank turnover rising to $357.296 billion.
US dollar turnover was 278% higher than the previous day’s record at the interbank window, reflecting a sharp increase in deals among market participants.
The CBN reported that the number of deals in the interbank market increased to 234, up from 86. This represents a ₦8.96 depreciation, reflecting some renewed pressure on the naira during the session.
With $54.341 billion in external reserves, the naira is expected to remain relatively stable in the near term, although some pressure may persist, as CBN intervention signals demand pressure at the NFEM window.
Overall, the FX market is expected to remain range-bound around current levels, with movements likely to be influenced by demand for the dollar and liquidity conditions.
