Naira Firms Against Dollar, Euro and Pound as Reserves Climb to $55bn

The naira traded stronger against the US dollar, the euro and the British pound at the foreign exchange market, helped by robust liquidity and growing external reserves. At the Nigerian foreign exchange market (NFEM), the spot rate closed at N1,327.78, 0.15 per cent stronger than Monday.

The parallel market also gained, up 0.36 per cent to N1,380.00. The movement narrowed the gap between the two trading segments to about N52, down from N55, according to Broadstreet investment firms, citing MarketForces.

Official and parallel rates

Against the pound, the naira settled at N1,774.31 officially, while the euro was quoted at N1,521.37. In the parallel market, the naira firmed against the euro to N1,565.00 but slipped against sterling to N1,865.00.

The exchange rate hovered between N1,325 and N1,332.5000 per dollar at the NFEM window, reflecting what traders described as a significant improvement in forex liquidity.

More deals, lower turnover

Interbank forex turnover fell 15 per cent to $99.170 million, down from $116.413 million declared for the previous day, according to a Central Bank report. The lower dollar volume was generated across 130 deals, which was above the 102 deals reported the previous day. The combination points to a bucket of low-ticket demand for international payments.

Reserves give cover

Nigeria's gross external reserves inched higher to about $55 billion, against $45.50 billion at the start of the year, continuing to support the currency.

For importers and businesses sourcing dollars, the narrower spread between the official and parallel markets eases the cost of pricing goods and settling obligations, though the fall in interbank turnover shows demand for smaller payment tickets is still running ahead of supply.