Naira Edges Higher Amid Decline in Interbank FX Turnover
The naira recorded a modest gain in the foreign exchange market on Thursday, as foreign exchange supply exceeded international payment demand.
According to trading data from the Central Bank of Nigeria (CBN), the local currency appreciated 0.07% against the US dollar at the official window, closing at ₦1,331.6139 compared to ₦1,332.5893 in the prior session.
Spot FX rates traded between ₦1,327 and ₦1,333.5000 at the Nigerian Foreign Exchange Market (NFEM) during Thursday’s intraday session.
FX liquidity improved as foreign portfolio investors provided momentum, while non-bank corporates added to supply, supported by hard currency flows from exporters and importers.
Interbank FX turnover fell approximately 60% to $201.562 million, according to a CBN report, down from $490.855 million the previous day.
Activity among financial institutions at the interbank window slowed sharply, with both US dollar volume and deal count declining. The number of deals dropped to 128 from 179 on Wednesday, the CBN report showed.
The naira also rose 0.07% against the British pound to ₦1,764.26/£ and against the euro to ₦1,490.48/€ at the official window.
In the parallel market, the dollar declined 0.29% to ₦1,370.00, the pound fell 0.55% to ₦1,810.00, and the euro slipped 0.33% to ₦1,505.00. The spread between the official and parallel markets narrowed to 2.88% from 3.11%. Year-to-date, the dollar is down 7.25% against the naira at the NFEM window.
The exchange rate is expected to remain stable at the official window, with the parallel-market gap staying below 3%. AIICO Capital Limited notes that oil prices above US$100 should sustain dollar supply and support the naira.