The naira made notable gains against the US dollar across various forex markets, driven by enhanced foreign currency liquidity in Nigeria’s autonomous foreign exchange market.
According to data from the FMDQ platform, the naira strengthened by 0.84% during the official session, closing at N1,532 per dollar. According to AIICO Capital Limited, the trading range for transactions was reported to be between N1,515 and N1,550, with improved dollar availability providing support.
On the Electronic Foreign Exchange Matching System (EFEMS), the naira edged up by 0.1%, settling at N1,547.46 per dollar on Thursday. Meanwhile, in the parallel market, the local currency saw a notable improvement of N65, with operators trading dollars at N1,635 per dollar to meet demand from invisible FX users.
The Central Bank of Nigeria (CBN) played a key role in stabilising the naira, injecting $28.5 million into the forex market midweek. The intervention targeted authorised dealer banks, with auction rates ranging between N1,500 and N1,549 per dollar.
This liquidity boost coincided with a rise in Nigeria’s gross external reserves, which climbed to $40.424 billion. The reserves benefited from sustained inflows from various sources, including remittances and other foreign investments.
Despite the gains in the naira, global markets saw mixed outcomes. Oil prices slipped as expectations of ample supply outweighed optimism around a potential US interest rate cut. Brent crude traded at approximately $72.65 per barrel, while WTI settled around $69.30 per barrel.
Gold prices also fell by over 1%, trading at $2,680.60 per ounce. Investors cashed in on earlier gains after gold hit a five-week high, adjusting positions ahead of an upcoming Federal Reserve meeting.
The recent increase in the value of the naira is a result of the CBN’s strategic interventions and expanded liquidity. However, consistent inflows, governmental actions, and more general worldwide economic trends continue to be necessary for currency market stability.
