The Nigerian naira strengthened modestly on Thursday after the Central Bank of Nigeria (CBN) sold U.S. dollars to eligible deposit money banks (DMBs) in a move aimed at bolstering liquidity in the foreign exchange market.
The official spot exchange rate improved to ₦1,328.2154 per US dollar at the Nigerian Foreign Exchange Market (NFEM) window, compared with ₦1,329.2129 per US dollar in the preceding session.
The local currency’s gains were backed by the CBN’s foreign exchange intervention totalling $151 million, which was distributed to financial institutions following a recent N9 decline in the naira. Transactions were executed within a range of N1,322.7100 and N1,333 per U.S. dollar at the official market window.
According to data published by the CBN, activity among market participants as market makers intensified significantly on Thursday, with interbank turnover climbing to $357.296 billion.
U.S. dollar trading volume surged 278% compared with the prior day’s level at the interbank window, signalling a notable uptick in deal-making among market participants.
The CBN reported that the total number of transactions in the interbank market rose to 234 from 86, representing a ₦8.96 depreciation that reflected renewed pressure on the naira during the session.
With $54.341 billion in external reserves, the naira is likely to hold relatively steady in the near term, though some continued pressure cannot be ruled out, as the CBN intervention points to demand pressures at the NFEM window.
Overall, the foreign exchange market is expected to trade within a narrow range around current levels, with movements largely determined by dollar demand and prevailing liquidity conditions.
