Nigerian Naira Strengthens Amid Enhanced FX Liquidity, Ends at N1,346 per Dollar

The Nigerian naira appreciated against its currency pairs on Tuesday, as improved foreign exchange conditions were bolstered by central bank intervention and inflows from foreign portfolio investors.

The local unit gained seven basis points against the U.S. dollar, driven by a marked rise in interbank forex market activity, with both transaction volume and deal count surging.

Data from the Central Bank of Nigeria indicate that the official exchange rate rose to N1,346.9348 per U.S. dollar, compared with the prior level of N1,347.9435.

Intraday trading ranged from N1,334 to N1,349.5000, reflecting increased U.S. dollar volume. Demand pressure subsided with new inflows from foreign portfolio investors, non‑bank corporates, and other sources.

Recent market cycles experienced heightened demand pressure as foreign portfolio investors withdrew from local equities and adjusted fixed‑income positions, creating short‑term dollar liquidity constraints.

The market recorded a spike in service‑related requests and increased inventory imports in preparation for the festive season, which normally heightens dollar demand.

The Central Bank disbursed $950 million to mitigate the impact of heightened forex demand. Instead of directly fixing rates, the CBN’s contemporary intervention approach cushions the market.

FX analysts noted that by providing liquidity—such as the recent tactical direct sales to banks—the apex bank absorbs sudden demand spikes, keeping the naira stable within a narrow band.

In the Nigerian foreign exchange market, interbank turnover surged 447% to $118.957 million, up from $21.765 million the prior day. The number of interbank deals rose to 117 from 23.

Nigeria’s foreign reserves stay elevated, although recent outflows have risen. The decline followed the latest official‑window FX intervention amid elevated global oil prices.

Oil futures fell on Tuesday amid a choppy session, with concerns over U.S. strikes on Iranian targets tempered by ongoing diplomatic efforts to resolve U.S.-Iran tensions.

Brent crude for January delivery dropped 1.1% to $103.60 per barrel, while West Texas Intermediate for December slipped 0.4% to $96.09 per barrel.

Money market rates remain broadly stable as excess liquidity exceeds N7 trillion.

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