Naira Rises 116 Pips Against Dollar On FX Liquidity Boost – MarketForces Africa

Nigerian Naira Gains 116 Pips Against Dollar on Expanded Foreign Exchange Liquidity

The Naira strengthened by 116 pips, or 1.16% week-over-week, against the US dollar in the official foreign exchange market following intervention by the Central Bank of Nigeria (CBN).

The Central Bank of Nigeria stepped in by selling $500 million to authorized dealers at the official window after a sharp depreciation of the Naira that pushed the spot rate to N1,367.

Following the liquidity injection, the local currency closed on October at N1,346.2565 per US dollar, gaining the full 116 pips at the official window over the past week, according to CBN data.

The currency opened the month at N1,329.16 per US dollar but ended the week on weaker terms due to a US dollar liquidity shortfall, a gap that the central bank subsequently bridged.

Throughout the week, the Naira exhibited mixed performance against the US dollar across both the official and parallel foreign exchange markets. In the parallel market, it depreciated 0.47% week-on-week, reaching N1,369.

Nigeria’s foreign reserves increased marginally by 0.14% to $55.26 billion, signaling a modest improvement in the nation’s external liquidity position.

According to FX analysts cited by MarketForces Africa, the exchange rate movement reflects a broader economic shift, as markets anticipate continued monetary easing while Nigeria maintains a disinflationary stance.

Rising oil prices have kept Brent crude at an eight-month high, reflecting a significant supply shock in the global commodities market. Although energy costs have risen, the development is fiscally beneficial for the Nigerian government.

Crude oil prices surged last week, extending a monthly rally driven by escalating Middle East tensions and Houthi attacks on Saudi infrastructure.

Brent crude and West Texas Intermediate (WTI) traded at $116.56 and $103.35 per barrel, respectively, in preparation for the November 3 U.S. midterm elections. Meanwhile, Nigeria’s Bonny Light crude fell 8.19% to $119.23 per barrel.

The currency is expected to remain mixed across foreign exchange markets in the near term, supported by marginal improvements in external reserves and potential foreign exchange inflows.

The pound fell to ₦1,803.24 at NFEM, while the euro weakened to ₦1,508.59. In the parallel market, both the pound and euro remained unchanged. The NGX All Share Index rose, with FirstHoldco driving trading volume.

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