Naira Diverged as FX Interventions Take $2.48bn in April
The Nigerian naira traded on a mixed note across foreign currency markets as Central Bank FX interventions took $2.48 billion in April while data showed gross external reserves pick up further, currently above $38 billion. The Apex Bank became aggressive in driving FX inflows with $2.48 billion spending to defend the local currency in the currency market in April.
According to data from the CBN, official exchange rate declined to N1606 per US dollar amidst expectation that the local currency will continue to trade range bound with FX interventions. The naira however gained in the parallel market to close at N1605 om Tuesday.
The Apex Bank is expected to halt foreign currency sales to Bureau de Change (BDCs) operators as scheduled analysts said there is possibility that the authority may extend its timeline as the local currency trade rangebound.
In April, the CBN injected $2.48 billion into forex market to keep the supply side strong, and ensure exchange rate stability. In an update, analysts at AIICO Capital Limited said FX demand stayed high amid constrained supply, with exporters serving as the primary source of foreign exchange.
The USDNGN pair moved within a range of N1,603.00 to N1,609.50, AIICO Capital Limited told investors in its market update. On the Nigeria foreign exchange market, the Naira depreciated slightly by 6 basis points to settle at N1,606.6413 as the CBN employs OMO bills sales to drive FX inflow as oil prices fluctuate.
Oil prices jumped nearly 4% on Tuesday, rebounding from a four-year low as demand signals from Europe and China improved, Middle East tensions rose, and bargain buyers returned following OPEC+’s decision to increase output.
Brent crude climbed $2.37, or 3.9%, to $62.60 a barrel while U.S. West Texas Intermediate (WTI) rose $2.42, or 4.2%, to $59.55. Gold prices also advanced, reaching a two week high on post-holiday demand from China and renewed worries over potential U.S. tariffs on pharmaceutical imports.
Investors closely watched developments ahead of the Federal Reserve’s policy decision. Spot gold gained 1.9% to $3,395.94 an ounce after briefly touching a two-week peak near $3,500.05. #Naira Diverged as FX Interventions Take $2.48bn in April Oil Falls Below $60 as OPEC+ Members Set to Boost SupplyThe post Naira Diverged as FX Interventions Take $2.48bn in April appeared first on MarketForces Africa.