Market News

BY MOTOLANI OSENI

The naira appreciated at the official foreign exchange (FX) window, buoyed by a significant rise in US dollar turnover in the currency market, even as Nigeria’s external reserves declined to $37.3 billion, according to data from the Central Bank of Nigeria (CBN).

The local currency maintained its modest upward trend throughout the week, supported by intermittent inflows from foreign portfolio investors (FPIs), exporters, and oil receipts. These inflows helped sustain supply levels in the absence of direct FX intervention from the CBN, keeping market pressures under control.

Early in the week, the market remained relatively quiet, with trades oscillating between N1500 and N1558 to the dollar. The naira fixing settled at N1549.57, according to insights from investment firm AIICO Capital Limited. Despite the lack of CBN support, the consistent inflow of foreign exchange helped stabilise the market mid-week, with marginal movements observed in spot rates.

A sharp uptick in activity occurred toward the end of the week, driven by a reported turnover of $324 million, which significantly boosted market liquidity. This liquidity injection pushed spot rates to as low as N1510 – N1520 per dollar. The fixing further dropped to N1549, reflecting increased supply pressure in favour of the naira.

By the close of trading on Friday, the naira appreciated to N1539.2359 per dollar, marking a week-on-week gain of 52.5 basis points. However, external reserves fell by $293.87 million to $37.369 billion, indicating a continued strain on reserve buffers despite improved currency market conditions.

Meanwhile, global oil prices experienced mixed signals. Although prices rebounded slightly on Friday following speculation that OPEC+ might raise production in August, the overall performance was weak. Brent crude ended the week at $67.77 per barrel, up only 4 cents, while West Texas Intermediate (WTI) rose 28 cents to $65.52 per barrel. Despite the late recovery, both benchmarks recorded their steepest weekly decline since March 2023, with losses nearing 12 per cent.

In the commodities market, gold prices slumped sharply as risk appetite improved following reports of a U.S.-China trade deal, diminishing demand for safe-haven assets. Spot gold fell 1.5 per cent to $3,277.17 an ounce and dropped 2.8 per cent for the week, hitting a one-month low.

Analysts noted that with geopolitical tensions fading, the market is gradually shifting its focus back to core fundamentals, including interest rate trends, inflation outlook, and global trade dynamics.