The Nigerian naira experienced a market-wide rally on Tuesday as foreign transactions and import payments eased. The Central Bank of Nigeria (CBN) has been funding rising demand for US dollars amidst a sustained decline in FX inflows.
FX data published today showed that the naira strengthened by 0.45% to ₦1,449.99/$ at the official window. Reflecting the absence of FX pressure, the intraday spot rate peaked at N1455.500, a significant improvement from N1466 quoted on the previous day.
Spot rate touched an intraday low of N1447.5000 with a day close of N1452 per dollar, according to the CBN daily FX update.
Coronation Merchant Bank Limited said in a report that FX inflows into the Nigerian foreign exchange market declined by about 50% week on week to $741 million last week, from $1.46 billion in the previous week.Forex Trading Platform
The research unit of the merchant lender reported that the CBN was the key participant, with the highest contribution to the foreign exchange liquidity last week, accounting for 27.73% of total fx supply.
The Apex Bank was followed by exporters with a 24.52% contribution. Other contributors include foreign portfolio investors (24.23%), non-bank corporates (13.78%) Individuals (7.37%), while others accounted for 2.37%.
For first time in month, the CBN published gross external reserves declined marginally by 0.58% to close at US$45.21 billion on Friday.
The marginal decline in reserves reflect ongoing pressures as the CBN continued to intervene in the FX market to manage excess volatility.
In the parallel market, the naira appreciated to ₦1,463/$, reflecting improved currency sentiment and reduced pressures across both the regulated official segment and the informal foreign exchange market.
Elsewhere, global oil prices edged up on Tuesday as investors assessed stronger-than-expected U.S. economic growth and the risk of disruptions to oil supply from Venezuela and Russia.
Brent crude inched up 72 cents or 1.17%, to $62.30 per barrel, while U.S. West Texas Intermediate (WTI) followed with 25 cents increase, or 0.43%, to $58.26.
Similarly, gold edged up 0.8%, powered by safe-haven flows. Spot gold crept up 0.96% to $4,488.47/oz, while U.S. gold futures followed up with 1.09% leap to $4,518.15/oz. Analysts expect oil prices to remain supported by supply-side geopolitical risks, while gold stays firm on safe-haven demand.