Naira Depreciates over Rising Foreign Payments
The naira is not getting better at the official and parallel markets despite $100 million FX sales to banks at the beginning of the week, a move that shrank Bureaux de change operators to 82.
The market continues to suffer from imbalanced demand for international payments via the official window, and FX inflows across key sources include foreign portfolio investors, exporters, non-bank corporates (especially international oil companies), individuals and others.
With a significant increase in year-end FX requisitions to settle import payments, total inflows have continue to track below $900 million as per the previous week’s data, tracking behind $1.4 billion seen in early Q4.
On Wednesday, the naira weakened across both market segments, declining BY 0.07% to ₦1,455.38 per dollar at the official window, according to the Central Bank of Nigeria (CBN) daily fx update.
MarketForces Africa reported that the CBN sold $100 million to banks to strengthen total forex supply and stem the negative tide against the local currency. The new intervention was in addition to $150 million the authority injected into the official window last week.
In November, $400 million was spent to mop up naira from the market, but demand for dollars eclipsed all FX inflows, causing a dip in the value of the local currency.
In the parallel market, the naira also depreciated to ₦1,475 per dollar, reflecting softer currency sentiment and intensified pressure across both the regulated official segment and the informal foreign exchange market.
Latest data from the CBN shows that Nigeria’s gross external reserves climbed to $45.382 billion amidst uncertainties in the global commodity market. # Naira Depreciates over Rising Foreign Payments
