Naira strengthens, gains N10 against US dollar

The naira started the week on a positive note, gaining N10 against the US dollar on Monday at the Nigerian Foreign Exchange Market (NFEM).

The local currency’s appreciation comes after facing pressure at the end of last week. The official exchange rate had closed at N1,475/$ on Friday, reflecting a 1.37% week-on-week decline at the NFEM window.

FX inflows in the official market fell by about 33% week on week to $1.1 billion, an update from Coronation Merchant Bank Limited revealed.

The decline in US dollar volume provides a partial explanation for the exchange rate fluctuation at the official currency market last week, analysts told MarketForces Africa, maintaining a positive outlook on the spot rate.

Updated FX data from the Central Bank of Nigeria (CBN) on Monday revealed that the naira strengthened by 0.69% to close at N1,465.29 per greenback.

It was also observed that the naira reached an intraday high of N1470, which translates to a sharp recovery when compared with N1482/$ quote on Friday.

The CBN Sold $70 million to banks as part of its FX intervention to keep dollar supply strong and achieve a stable exchange rate.

In spite of fluctuation in oil price, Nigeria’s external reserves surged to $42.696 billion last week, and the market anticipates additional inflows to lift the balance this week.