The naira recorded a slight gain against the US dollar in the foreign exchange (FX) market, closing at N1,499 per dollar in the official window on Wednesday. Despite a sharp 46% decline in forex inflows last week, the local currency remained relatively stable, indicating eased demand pressure.
The naira increased by 0.16%, to settle at N1,499.08 per dollar, according to FMDQ statistics. In order to maintain price stability, the Central Bank of Nigeria (CBN) has been regularly engaging in the foreign exchange market. In an effort to increase liquidity, the regulator has also increased US dollar sales to commercial banks.
This has resulted in a stronger naira across different currency pairs, including the US dollar, British pound, and euro. The stability seen in the official forex window has also extended to the parallel market, where Bureau de Change (BDC) operators are the main players. On Wednesday, the naira traded at N1,495 per dollar in the parallel market, maintaining its steady position.
Latest data from the Nigerian Autonomous Foreign Exchange Market (NAFEM) revealed that total inflows fell from $1.8 billion the previous week to $980.20 million—a 46% decline. However, various players contributed to the total FX inflows:
- The CBN accounted for 17.02% of the total supply.
- Foreign Portfolio Investors (FPIs) contributed the largest share, at 41.03%.
- Non-bank corporates provided 27.35% of inflows.
- Exporters contributed 14.22%.
- Other sources accounted for 0.38%.
Meanwhile, global oil prices continued to hover near two-month lows. Brent crude dropped by 31 cents (0.42%) to $72.71 per barrel, while U.S. West Texas Intermediate (WTI) fell by 20 cents (0.29%) to $68.73 per barrel. The dip in oil prices followed an unexpected rise in U.S. fuel stockpiles, signaling weaker demand. Additionally, ongoing Russia-Ukraine peace talks have further pressured prices.
Following a record-breaking rise, gold prices also fell as investors anticipated updates on U.S. tariff policies and inflation data. After hitting an all-time high of $2,956.15 on Monday, spot gold fell 0.7% to $2,894.55 an ounce.
