The Nigerian naira strengthened against the U.S. dollar in the foreign exchange (FX) market on Monday as gross external reserves reached a 36-month high. Data from the FMDQ platform indicated that the naira appreciated by 14 bps to close at NGN 1,539.55 per U.S. dollar.
This positive trend was driven by FX intervention sales by the Central Bank of Nigeria (CBN), which helped stabilize the exchange rate against the U.S. dollar. Improved liquidity conditions in the forex market further supported the naira, with transactions ranging between NGN 1,532.00 and NGN 1,545.00.
Last week, the CBN sold $197.7 million to authorized dealer banks in a bid to boost FX supply. Despite these efforts, the naira depreciated by NGN 2 per dollar during the week.
External Reserves and FX Flows
Recent CBN data shows that gross external reserves climbed to $40.816 billion, marking a significant recovery fueled by increased inflows from foreign portfolio investors. Foreign exchange inflows rose by 3.01% to $22.89 billion in Q2 2024, compared to $22.22 billion in the previous quarter.
Foreign exchange outflows also increased by 15.18% to $8.43 billion, resulting in a net FX inflow of $14.46 billion, down 2.97% from $14.89 billion in the preceding quarter.
Global Commodities Update
In the global commodities market, oil prices dipped on concerns of a potential supply surplus in 2025 and a stronger U.S. dollar. Trading activity was subdued ahead of the Christmas holiday, with Brent crude priced at approximately $72.03 per barrel and WTI at $68.66 per barrel.
Gold prices also declined amid thin holiday trading, impacted by the strong dollar and elevated U.S. Treasury yields. Investors awaited clearer signals on the Federal Reserve’s 2025 monetary policy stance, with gold trading around $2,612.58 per ounce.
 market on Monday as gross external reserves....){kind=link}