The Nigerian naira appreciated against the US dollar on Tuesday in the official foreign exchange market, as the Central Bank of Nigeria (CBN) injected additional dollar liquidity to ease demand pressures.
According to a report by investment banking firm CardinalStone Partners Limited, the CBN intervened in the market, selling over $30 million at rates ranging between N1,590.00 and N1,601.50 per dollar.
As a result, the exchange rate at the Nigerian Foreign Exchange Market (NFEM) improved by 1.66%, closing at N1,599.00/$.
In contrast, the parallel market witnessed a depreciation of the local currency by 31 basis points, with the exchange rate settling at N1,620.00/$.
The spot rate appreciation was attributed to the improved supply of foreign exchange, which met existing demand in the market. Additionally, foreign portfolio investors slowed down the pace of divestments, providing some relief to the financial markets.
Latest figures indicated that the CBN continued to play a key role in stabilizing the Nigerian Autonomous Foreign Exchange Market (NAFEM) through consistent dollar sales to commercial banks.
Data showed that total inflow into the NAFEM window rose to US$847 million, up from US$795 million recorded the previous week, largely supported by the apex bank’s intervention.
Breakdown of inflow sources revealed that the CBN contributed 22.87%, foreign portfolio investors (FPIs) 32.26%, non-bank corporates 22.0%, exporters 17.97%, and other sources 4.90%.
Oil and Gold Markets React to Global Developments
In the international commodities market, oil prices edged lower despite some positive developments such as U.S. tariff exemptions for electronics and a recovery in China’s crude oil imports for March.
Market sentiment remained dampened by lingering concerns over the prolonged U.S.-China trade dispute and its potential implications for global economic growth and energy consumption.
Brent crude futures dropped by 42 cents, or 0.65%, to trade at $64.34 per barrel, while the U.S. West Texas Intermediate (WTI) crude fell by 53 cents, or 0.9%, to $60.97.
Meanwhile, gold prices retreated after reaching record highs, as easing trade tensions improved investor risk appetite. Spot gold declined by 1.1% to $3,200.11 per ounce, while U.S. gold futures shed 0.9% to close at $3,216.20.
Nonetheless, on Tuesday, spot gold regained some ground, rising by 0.6% to $3,230.18, supported by ongoing safe-haven demand and a weaker dollar amid continued trade-related uncertainties.
