The gross balance of Nigeria’s external reserves fell sequentially over the last three days, which caused the naira to weaken versus the US dollar on foreign exchange (FX) markets. Following a $50 million injection the day before, the Central Bank of Nigeria (CBN) is expected to provide more support, according to the currency market. The USD/NGN pair fluctuated between N1,589.50 and N1,595.00 during the session.
Despite huge US dollars from the exporters, the CBN flooded the foreign exchange market with $190 million last week. The authority also added $50 million on Tuesday to keep the naira stable by driving FX inflows in the absence of significant FX receipts from oil exports.
In a macro report, Verto FX stated that although the CBN has continued to intervene daily to the tune of $50 million to $100 million, it is generally believed that this is done merely to keep supplies trickling into the FX market rather than to meaningfully hold the rate constant. Due to supply concerns, oil prices increased by more than 1% on Wednesday after OPEC+ decided to retain current output levels and the United States banned Chevron from exporting Venezuelan crude.
