The Nigerian naira strengthened further in the currency market, bolstered by a higher supply of US dollars. On Thursday, it gained 1.7%, reaching N1,458.95 per US dollar in the official exchange market.
Strong foreign exchange inflows from three main sources—the Central Bank of Nigeria (CBN), foreign portfolio investors (FPIs), and international oil companies (IOCs)—were the main drivers of this upward trend. By engaging in financial operations and selling foreign exchange, the CBN also contributed to the expansion of dollar availability.
With more dollars in the system, the pressure on demand eased, helping the naira strengthen. Earlier in the week, dollar inflows from exporters had also increased, contributing to a 125% rise in foreign exchange supply compared to the previous week.
According to AIICO Capital Limited, most transactions took place at rates between N1,490 and N1,517 per dollar. Analysts believe the recent surge in dollar supply has renewed investor confidence, further boosting the naira’s value.
To increase transparency in the currency market, the CBN recently introduced a foreign exchange code for transactions and warned banks about potential penalties for violating regulations.
With Brent crude trading at $76.48 per barrel and West Texas Intermediate (WTI) at $72.46 per barrel, the price of oil stayed steady globally in the meantime. Due to growing demand for secure investments amid economic concerns, gold prices hit an all-time high. Additionally, investors are watching the Organisation of the Petroleum Exporting Countries’ (OPEC+) February 3 policy meetings, which may have an effect on market developments.
