Naira gains as external reserves rise in 3 weeks

The pressure on the foreign exchange (FX) market eased slightly as naira appreciated across market segments on Wednesday.

Naira gained 5.50 percent as the dollar was quoted at N801.10 on Wednesday as against N847.77 quoted on Tuesday, at the Nigerian Autonomous Foreign Exchange Market (NAFEM), data from the FMDQ indicated.

At the parallel market, popularly called black market, naira appreciated against the dollar for the first time in three weeks, gaining 0.76 percent (N10) to N1,300 on Wednesday over N1,310 quoted on Tuesday at the black market.

This comes as external reserves have risen by 0.21 percent in the last three weeks, following increased oil production and prices. The price of Brent crude stood at $88.41 as of October 25, 2023.

Data from the Central Bank of Nigeria (CBN) showed that foreign reserves rose to $33.29 billion as of October 24, 2023 compared to $33.22 at the beginning of the month on October 3, 2023.

“Reserves may have risen due to the pick up in oil prices, or a rise in oil production,” said Charlie Robertson, head of Macro Strategy FIM Partners UK Ltd.

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Uche Uwaleke, professor of Capital Market at the Nasarawa State University Keffi, said the increase was due to increase in oil revenue (crude oil price increase plus Increase in crude oil production).

He said external reserves will also increase if the government has received any of the foreign loans it is negotiating.

“The trends in the FX market stayed the same yesterday. We continued to see flows in the market driven by local players sourcing funds to clear their outstanding obligations while offshore and apex bank remained out of the market, analysts at Stanbic IBTC bank said in a new report.

According to the report, total volume traded printed higher by about $12.08 million to $100.18 million.

The range of indicative bids shown by most market players was between N730 00/$1 and N990 00/$1 The NAFEM closing rate was N801.10/$1 The highest and lowest rates traded in the market were N891. 00 and N730.00 respectively.

The NAFEX fixing inched higher by N5.99 from N792.02 the previous day to N798.01 per dollar, the report noted.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.