Market News
Naira closes flat after CBN sells $86.6m at NFEM - BUSINESSDAY
The naira closed flat at the official foreign exchange (FX) market on Monday, following the Central Bank of Nigeria’s (CBN) sale of approximately $86.6 million last week, which helped ease demand pressure in the market.
At the close of trading, the naira recorded a marginal depreciation of 0.07 percent as the dollar was quoted at N1,548.52, reflecting a loss of N1.16 from the N1,547.36 it closed at on Friday at the Nigerian Foreign Exchange Market (NFEM), according to data from the CBN.
In the parallel market, also known as the black market, the naira appreciated by N5, with the dollar selling at N1,595 on Monday, compared to N1,600 on Friday, according to street traders and online data collating platforms.
The FX market recorded total inflows of $1.03 billion last week, with foreign portfolio investors (FPIs) contributing 67.29 percent, the highest share for the fifth consecutive week. This trend signals sustained foreign investor interest in Nigeria’s fixed-income market, according to a report by the research department of Coronation Merchant Bank.
Non-bank corporates accounted for 13.36 percent of the inflows, exporters contributed 10.87 percent, while other sources made up the remaining 0.17 percent. As part of its intervention, the CBN supplied $86.6 million into the market last week to ease foreign exchange demand pressure.
According to the report, the naira appreciated by N1.99 or 0.13 percent week-on-week at the NAFEM market, closing at N1,547.36 per dollar. The appreciation was supported by continued inflows from FPIs, exporters, and non-bank corporates. During the week, the naira traded as high as N1,544.63 per dollar.
However, in the parallel market, the naira weakened by 0.31 percent, closing at N1,605 per dollar, indicating a widening gap between the official and parallel market exchange rates.
CBN data showed that gross foreign reserves closed the week at $37.71 billion as of Thursday, reflecting a decline of $219.56 million or 0.58 percent week-on-week.
Looking ahead, the analysts expect the naira to trade within a narrow band, with a mild appreciation bias if FPI inflows and supply from exporters and corporates continue. However, lingering demand pressures may limit further gains. Market watchers are also monitoring the growing divergence between parallel market and official rates, which may suggest a disconnect in the FX market.
