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.

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.