Naira Steadies at N1,359 Over Improved FX Liquidity

The naira held firm against the US dollar on Friday, closing at N1, 359 at the official window, supported by improved liquidity in the foreign exchange market and sustained inflows into the financial system.

The local currency extended its gains during the week as interbank liquidity strengthened, even as Nigeria’s external reserves declined by about $1 billion from their recent peak. The development signals continued intervention by the Central Bank of Nigeria (CBN) to meet foreign exchange obligations and clear outstanding liabilities, including payments for eligible non-bank corporates.

Market participants said FX inflows were bolstered by increased portfolio investments, often described as hot money, alongside direct supply from the central bank, helping to stabilise the currency at the official market.

At the parallel market, the naira also appreciated to N1,370 per dollar, reflecting stronger demand for the local currency within the informal segment.

In the commodities market, crude oil prices reversed sharply lower as traders unwound positions amid easing geopolitical tensions. Signs of progress in ceasefire talks between the United States and Iran reduced earlier supply concerns, although restrictions around the Strait of Hormuz continue to weigh on shipping activity.

Benchmark West Texas Intermediate crude (WTI) posted heightened volatility during the week, after rallying strongly in the previous period on Middle East tensions. Prices touched a high of $117.73 before falling to $91.05, with the commodity trading around $98.39 at the last count, down $13.15 or 11.79 per cent week-to-date.

The sharp correction reflects a shift in market sentiment, as traders moved from aggressive risk pricing to profit-taking, reassessing supply disruption fears that had driven the earlier rally.