CBN injects additional $150m into FX market to boost Naira

The Central Bank of Nigeria (CBN) injects $150 million into the foreign exchange market at the beginning of the week to keep the Naira safe from pressure. With sustained forex market intervention, a slew of analysts have formed a consensus that the exchange rate would trade range-bound in the second quarter. Last week, the Apex Bank sold $635 million to authorized dealer banks in FX market amidst efforts to strengthen liquidity levels in the market.
A potential slowdown in US dollar supply could trigger negative exchange rate movement, according to analysts who spoke with MarketForces Africa about persistent CBN actions in the currency market. Again, the Naira faced another round of demand pressure in the official window as offshore investors continued to exit positions in Naira assets. To stem the negative impacts of unusually high demand for US dollars, the CBN intervened with a sale of $150 million at rates between $/₦1,593.20 and $/₦1,623. Throughout the session, the USD/NGN pair moved within a range of $/₦1,593.10 to $/₦1,630, AIICO Capital Limited reported.
Data from the CBN showed that gross external reserves fell to $38 billion in the absence of additional inflows and a slowdown in oil FX receipts. In the global commodity market, oil prices fell on Monday despite some positive signals, including exemptions for electronics from U.S. tariffs and a sharp rebound in China’s March crude imports.
These factors were overshadowed by ongoing fears that the prolonged U.S.-China trade war could hurt global economic growth and weaken fuel demand. Brent crude dropped 42 cents, or 0.65%, to $64.34 a barrel, while U.S. West Texas Intermediate (WTI) crude slid 53 cents, or 0.9%, to $60.97. Meanwhile, gold prices declined over 1% after reaching a new record earlier in the day. Improved risk sentiment following the tariff exemptions on smartphones and computers contributed to the dip. Spot gold fell 1.1% to $3,200.11, while U.S. gold futures declined 0.9% to $3,216.20.