Naira strengthens as Forex Reserves rise for ninth consecutive week

Keep up with the latest news and be part of our weekly giveaways and airtime sharing; follow our WhatsApp channel for more updates. Click to Follow us

The Nigerian naira closed stronger over the weekend, appreciating to ₦1,520 per dollar, supported by steady increases in the country’s foreign exchange reserves.

Market reports from both the Nigerian Autonomous Foreign Exchange Market (NAFEM) and the parallel market showed the local currency advancing across board. At NAFEM, the naira firmed by one per cent to settle at ₦1,520 per dollar, while it traded at ₦1,535 in the parallel market. The ₦15 gap between both markets was seen as a sign of improved balance between forex demand and supply.

Fresh data from the Central Bank of Nigeria (CBN) confirmed that reserves climbed for the ninth week in a row, closing at $41.5 billion, up from $41.268 billion the previous week. This added $232 million to the nation’s external buffers.

Analysts attributed the rally to strong inflows from foreign investors as well as targeted interventions by the apex bank. According to Cordros Capital Group, the currency’s performance was “supported by supply from foreign portfolio investors” in addition to a $15 million injection from the CBN.

Financial Derivatives Company Limited, led by Bismarck Rewane, also tied the upward trend to stronger global oil prices and new forex inflow windows created by the regulator. In a note to investors, the firm observed, “In the near term, we expect naira stability to persist on the back of resilient forex market liquidity. Renewed capital inflows should be supported by the anticipated Fed rate cut and broader easing in global yields, which would enhance investor appetite for naira assets.”

Cordros Capital further stressed that “improving non-oil export receipts and diminished incentives for speculative positioning in the naira are likely to sustain the momentum of domestic inflows.”

Experts believe both domestic and international inflows will remain strong and could even outperform the $2.51 billion recorded in 2024, helping to consolidate the currency’s resilience in the months ahead

Please don’t forget to “Allow the notification” so you will be the first to get our gist when we publish it. 
Drop your comment in the section below, and don’t forget to share the post