Naira Gains Ground as CBN Boosts Dollar Supply in FX Market

The naira strengthened against the US dollar at the official market on Tuesday, appreciating by N5.50 as foreign exchange (FX) demand pressures moderated.

According to investment banking firm CardinalStone Partners Limited, "the CBN was in the market today, selling over $30.00 million at rates between N1,590.00/$ and N1,601.50/$."

Following the intervention, the naira appreciated by 1.66% at the Nigerian Foreign Exchange Market (NFEM) window to close at N1,599.00 per dollar. Meanwhile, the parallel market saw a slight decline, with the naira weakening by 31 basis points to N1,620.00/$.

The improved spot rate reflected enhanced market liquidity, as dollar supply met demand levels. Additionally, foreign portfolio investors (FPIs) appeared to ease the pace of capital outflows from Nigeria’s financial markets.

Recent figures indicate that the Central Bank of Nigeria (CBN) has continued to drive FX supply at the Nigerian Autonomous Foreign Exchange Market (NAFEM), with weekly inflows rising to $847 million, up from $795 million the previous week.

The breakdown of inflows showed the CBN contributed 22.87% of the total, FPIs 32.26%, non-bank corporates 22.0%, exporters 17.97%, while other sources accounted for 4.90%.