Naira Strengthens As CBN Injects $146 Million Into Banks Over Two Days

Federation Account Amasses Over ₦5trn In 6months- RMAFC

The naira gained value against the US dollar in the foreign exchange market as demand pressures eased following two days of intervention by the Central Bank of Nigeria (CBN). The improved supply of US dollars in the official market outpaced daily foreign payment demands, stabilizing the local currency.

Data from the FMDQ platform revealed that the naira depreciated slightly by 0.06% in the official market, closing at N1,548.47 per dollar. AIICO Capital Limited noted transaction rates ranged from N1,500.00 to N1,570.00 per dollar. Meanwhile, in the parallel market, the naira appreciated by 0.18%, closing at N1,660.00 per dollar due to increased dollar availability.

CBN’s Forex Interventions

The CBN bolstered foreign exchange liquidity this week, selling $146.1 million to authorized dealer banks over two days.

On Tuesday, the apex bank sold $98.75 million at rates ranging between N1,545.00 and N1,553.00 per dollar. On Wednesday, another $47.35 million was injected into the market, with rates spanning N1,545.00 to N1,560.00, aimed at curbing persistent demand pressures.

External Reserves

Nigeria’s external reserves continued to decline, marking the sixth consecutive drop since last week, driven by demand for international payments. CBN data showed reserves stood at $40.42 billion as of Wednesday, down from $49.20 billion, reflecting the impact of heightened FX payment activity.

Commodity Market Overview

Oil prices fell after hitting multi-month highs earlier in the week, influenced by recent sanctions on Russia announced by US President Joe Biden and a surprising drop in US crude inventories.

Brent crude settled at $81.29 per barrel, while US West Texas Intermediate (WTI) closed at $78.68 per barrel on Thursday. Conversely, gold prices surged to a one-month high, supported by softer US core inflation data and falling Treasury yields, which increased expectations for a dovish stance from the Federal Reserve. Gold traded at approximately $2,718.00 per ounce.