On Wednesday, the naira enjoyed a significant daily rise of about 5% in the international currency market as statistics showed that a lump payment increased Nigeria’s gross external reserves.
The Nigerian naira rose 4.81% to₦1,558.75 per US dollar at the end of the trading day. The local currency rose following a record $250 million influx into gross external reserves on Monday.
Analysts believe that Nigeria will require sufficient FX liquidity to rebalance its currency rate direction. The local currency has suffered from a lack of US dollar inflows and rising demand.
This has made it difficult for the naira to keep gain. Since April, exchange rates across FX markets have been wobbling in the absence of significant FX liquidity drives in the currency market.
According to a review of movement in foreign reserves, the gross external reserves balance increased to $36.642 billion at the beginning of the week from $36.692 billion at the end of the previous week.
Some analysts said Nigeria expects inflows from recently completed domestic US dollar sales of $900 million. The debt office raised more than $500 million in an in an initial plan from domestic US dollar bonds offered to retail investors.
The naira closed at ₦1,645 to the US dollar in the parallel market, despite FX sales to currency traders at the informal FX segment. In the global commodity market, oil prices trended higher on Wednesday, with Brent Crude at $70.31 per barrel and WTI at $67.09 per barrel.
The local currency remained under pressure due to an intermittent back-up from the central bank that weakened the supply side.
