SAT APRIL 12 2025-theGBJournal| The naira fell sharply at close of trading Friday, at both the NFEM (2.0% to N1,617.00/US$) and FMDQ (N1,631.90) windows due to intensified foreign investor sell-offs driven by global risk-off sentiment, despite the intervention of the Central Bank of Nigeria (CBN)
The apex bank pumped $124 million as FX intervention to boost the market, and in effort to stabilize the naira. It equally injected liquidity into the interbank market. Both efforts were limited by dwindling external reserves and persistent US dollar demand, raising concerns about FX stability.
In the forwards market, the naira rates fell across the 1-month (-3.0% to N1,670.42/US$), 3-month (-3.6% to N1,752.18/US$), 6-month (-5.2% to N1,870.78/USD) and 1-year (-7.5% to N2,087.66/US$) contracts.
Meanwhile, the nation’s gross FX reserves declined for the fourth consecutive week by US$102.14 million w/w to US$38.04 billion (April 10).
The net FX reserves, now at $23.3 billion (7.3 months of import cover), offer a buffer above IMF thresholds, while JP Morgan’s interest in Nigerian OMO instruments suggests retained investor appetite despite oil-linked risks.
However, analysts suggests the naira is likely to remain under pressure amid persistent global uncertainty, driven by the US tariff-induced trade tensions that continue to trigger capital outflows.
”Compounding this are foreign investors’ concerns over declining oil earnings, stemming from the slump in oil prices — a development that could lead to a trade deficit and a shortfall in the current account,” Cordros Research analysts said.
Nevertheless, CBN’s sustained interventions are expected to cushion the naira from sharp depreciation in the near term.
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