Exchange rate narrows to N50 as Naira rises to N1,500/$

The Exchange rate on Tuesday narrowed down to N50 even as the naira appreciated to N1, 500 per dollar across foreign exchange (forex) markets due to sufficient foreign currency liquidity. 

Data from the FMDQ platform showed the naira appreciated by 0.04% in the official window, closing at N1,500.95 per dollar after forecast intervention sales to banks.

The Central Bank of Nigeria (CBN) sold $60 million to banks last week to boost the amount of foreign currency on the supply side. The Nigerian Foreign Exchange Market (NFEM) remained stable, with most transactions consummated between N1,480.00 and N1,515 per greenback.

Similarly, the naira climbed to N1,550 per dollar in the parallel market in the absence of demand pressures from invisible forex users. Hence, the exchange rate gap collapsed to N50 as exchange rate stability improved.

Analysts say foreign portfolio investors have continued to drive forex inflows into the market amidst increased positioning in the financial market, ramping up stocks with attractive valuation and increasing position in the fixed income market on the back of elevated yield.

In January, the Nigerian Foreign Exchange Market demonstrated relative stability, supported by improved liquidity from Foreign Portfolio Investors (FPIs), International Oil Companies (IOCs), and Central Bank of Nigeria (CBN) interventions. The naira fluctuated within a broad range of $/N1,440.00 to $/N1,570.00, with notable strengthening mid-month as increased supply eased demand pressure.

In the global commodity market, oil prices experienced a rebound amid persistent concerns regarding a possible global trade conflict following U.S. President Donald Trump’s recent tariff proposals targeting steel and aluminum.

Brent crude futures increased by 1.2 per cent, reaching $75.53 per barrel, while U.S. West Texas Intermediate crude rose by 1.3 per cent to $71.90. Concurrently, gold prices continued their upward trajectory, surpassing the key $2,900 mark due to heightened safe-haven demand, with spot gold surging to $2,900.25 per ounce.