Nigerian Naira Rallies on 132% Surge in Interbank FX Turnover
The naira rose against the US dollar at the Nigerian Foreign Exchange Market (NFEM) amidst a 132% surge in forex market turnover, reflecting increased trading activities at the official window.
The local unit staged a fresh rebound after successive depreciation against the greenback at the official window last week. The market saw improved US dollar liquidity, while settlement for international payments was lower than the previous week.
The FX activity pattern boosted the naira, which closed at N1364.8344 per US dollar at the NFEM window, from N1368.2232 at the official quote on Friday’s close.
The spot naira rate hovered between N1362 and N1368 per US dollar during the active trading session on Monday, suggesting FX conditions improved significantly early in the week.
Interbank FX transactions increased sharply as market makers’ activities raised total US dollar volume exchanged to $137.048 million, more than 132% above $58.990 million in turnover at the previous close.
The interbank FX turnover surge was driven by increased deals at the NFEM window. The Apex Bank reported that deal count at the interbank FX window rose to 138 from 67 on Friday.
Nigeria’s foreign reserves closed July at $51.92 billion, with Broadstreet analysts maintaining bullish predictions for the local currency on sustained FX inflows into the economy.
Global oil prices continue to fluctuate, with Iran and the US planning to resume peace talks. Crude oil prices weakened sharply, with Brent dropping 4.73% ($4.16) to approximately $83.77/bbl, while WTI declined 0.45% to about $79.98/bbl.
Gold softened slightly, falling 0.06% to around $4,053/oz, as investors monitored geopolitical developments and U.S. economic data. CBN Cuts Rate on 364-Day Nigerian Treasury Bills, Rejects N2.4trn
