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The Nigerian Naira rose against the US dollar in the foreign exchange (FX) market yesterday, settling at N1,499 in the official window.
According to analysts, “FX trading has been enhanced by transparency, liquidity, and foreign investors’ confidence.” The local currency rallied as forex market supply remained sufficient to meet aggregate demand from eligible FX users in the official window.
The Central Bank of Nigeria (CBN) has maintained its focus on FX market price discovery and has deployed aggressive US dollar sales to banks to strengthen market supply.
As a result, the Naira is trading strong against all foreign currencies, including the US dollar, sterling, and Euro. The same experience in the official window has also filtered into the informal currency market, where Bureau de Change (BDC) operators are the main actors.
The operators in the segment have been accessing foreign currency from banks at the official rate, as instructed by the Yemi Cardoso-led CBN leadership. Today, the Naira closed at ₦1,495 per US dollar in the parallel market, maintaining its stability.
Latest data from the forex market revealed that inflows into the Nigerian autonomous foreign exchange market (NAFEM) fell by about 46% last week. According to Coronation Research, “the NAFEM window recorded an inflow of US$980.20 million last week, as against US$1.80 billion recorded in the prior week.”
With sustained FX intervention, the CBN was the major contributor, accounting for 17.02% of the total inflow. Foreign portfolio investors (FPIs) contributed 41.03% of the total inflows into NAFEM, while non-bank corporates added 27.35%.
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Inflows from exporters accounted for 14.22% of the total amount on the supply side, while other sources accounted for 0.38%.
Meanwhile, oil prices remained near two-month lows as an unexpected rise in U.S. fuel stockpiles signaled weaker demand. Ongoing Russia-Ukraine peace talks also pressured prices.
Brent crude declined 31 cents (0.42%) to $72.71 per barrel, while U.S. WTI fell 20 cents (0.29%) to $68.73.
Gold prices retreated following a record rally, with investors awaiting inflation data and updates on President Donald Trump’s tariff policies. Spot gold dropped 0.7% to $2,894.55 an ounce, after hitting a record high of $2,956.15 on Monday.
The decline in gold prices was attributed to investors’ cautious approach ahead of the inflation data release and updates on President Donald Trump’s tariff policies.
In a statement, a market analyst said, “The gold market is taking a breather after the recent rally as investors await key economic data and policy updates.”
The analyst added, “The ongoing Russia-Ukraine peace talks and the decline in oil prices are also contributing to the decline in gold prices.”
Meanwhile, the Nigerian economy is expected to benefit from the stability in the foreign exchange market, with the naira maintaining its strength against major currencies.
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According to a statement by the Central Bank of Nigeria (CBN), “the stability in the foreign exchange market is a testament to the effectiveness of our monetary policy measures.”
The CBN added, “We will continue to work towards maintaining a stable foreign exchange market, which is essential for economic growth and development.”
As the foreign exchange market continues to evolve, investors and stakeholders will be watching closely to see how the naira performs in the coming days.
With the stability in the foreign exchange market and the decline in oil prices, the Nigerian economy is poised for growth and development.
As one analyst noted, “the current market trends are favorable for the Nigerian economy, and we expect to see positive growth in the coming months.
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