Naira Strengthens Across FX Windows as Dollar Liquidity Surges

Naira Strengthens Across FX Windows as Dollar Liquidity Surges

The Nigerian naira advanced against the U.S. dollar on Monday across both the official and parallel foreign exchange markets, propelled by robust dollar liquidity in the Nigerian Foreign Exchange Market (NFEM).

Analysts attributed the gains to ample forex supply capable of meeting demand, a marked improvement from the previous week’s subdued performance.

Data from the Central Bank of Nigeria (CBN) showed the naira appreciated 0.11% at the official window, closing at ₦1,329.80 per dollar compared with ₦1,331.20 on Friday. Transactions at the NFEM ranged between ₦1,327.01 and ₦1,336 per dollar.

Market activity slowed, with interbank turnover declining 28.4% to $116.41 million from $162.67 million in the prior session. The number of executed deals fell to 102 from 127.

Nigeria’s gross external reserves climbed above $54.72 billion, bolstered by sustained inflows from diaspora remittances and crude oil proceeds. The reserve buffer reinforces confidence in the central bank’s capacity to support the currency against external shocks.

Improved sentiment has led analysts to revise year-end exchange rate forecasts toward ₦1,300 per dollar, amid growing views that the naira remains undervalued.

In the parallel market, the currency firmed 0.07% to ₦1,372 per dollar, narrowing the spread with the official window to ₦43.

Source link