The naira rose against the US dollar in the foreign exchange market as demand pressures eased after two days of FX intervention by the Central Bank. The local currency strengthened as US dollar volume available in the official market outweighed daily demand logged for foreign payments.
According to Market Forces Africa, Spot FX data obtained from the FMDQ platform revealed that the naira depreciated by 0.06% in the official window, closing at N1,548.47 per dollar. Analysts at AIICO Capital Limited reported that transactions executed within N1,500.00 and N1,570 per greenback. Conversely, the exchange rate appreciated by 0.18% in the parallel market, ending the day at N1,660 per US dollar due to improved FX supply.
The Central Bank of Nigeria (CBN) remained active in the foreign exchange market this week, selling a total of $146.1 million to authorised dealer banks to boost liquidity in the FX market.
On Tuesday, the CBN intervened in the forex market, selling $98.75 million to banks between the rate of N1,545 – N1,553 per US dollar. Also on Wednesday, the Apex Bank intervened in the forex market again as demand pressures persisted, selling $47.35 million to banks between the rate of N1,545 – N1,560.
Nigeria’s gross external reserves declined sixth times since last week as demand for international payments materialised. Data from the CBN revealed that external reserves printed lower at $40.422 billion on Wednesday. The nation’s foreign reserves had climbed to $49.20 billion before pressures from FX payments reduced it.
