Naira Pulls Back as External Reserves Draw Down Hits $1.4bn
The naira fell to approximately N1350 against the US dollar at the Nigerian foreign exchange market on Monday, reflecting pressure from surging international payments at the start of the week.
The local currency depreciated by ₦6.03 against the U.S. dollar, with data published by the Central Bank showing Nigerian Foreign Exchange Market interbank turnover dropped to N18.773 million from N124.34 million on Friday.
The depreciation persisted despite the Central Bank FX intervention and local participants’ demand, as the market underperformed its previous week’s close, analysts said.
The Naira hovered around the ₦1,353.00/$ and ₦1,341.00/$ band during the session before settling at ₦1,349.67/$. Latest data showed that gross external reserves printed at $48.62 billion.
The nation’s foreign reserves lost $1.4 billion from 2009 peak of $50 billion. Based on the pattern seen over the last few weeks, the foreign reserve is expected to decline further amid fluctuations in crude oil prices in the global commodity market.
Last week, the Naira strengthened modestly at the NFEM window over the past week, appreciating by 0.99% w/w to close at N1,343.64/US$1, compared to N1,356.89/US$1 at the close of the previous week.
The currency traded within a relatively tight range during the week, briefly firming to around N1,342.30/US$1 midweek before stabilising toward the close.
In contrast, the parallel market rate weakened slightly, with the Naira depreciating by 0.71% w/w to N1,400.00/US$1, indicating some demand pressure in the informal segment despite improved conditions at the official window.
Global oil prices jumped around 6% in Monday trading on uncertainty over peace talks between the U.S. and Iran after violence flared around the Strait of Hormuz.
Brent crude spiked by 5.32%, gaining $4.81 and hovering around $95.19 per barrel as of 20:45, while U.S. West Texas Intermediate (WTI) jumped 5.55% to trade around $87.17 per barrel.
However, Gold prices fell to a one-week low on Monday before recovering slightly as Iran’s threat of retaliation to the U.S. takeover of an Iranian cargo vessel drove the dollar and oil prices higher.
Spot gold price gained 1.19%, to trade around $4,811.98/oz, while U.S. gold futures lost 1.21%, hovering around $4,832.26/oz. FG Moves to Bridge Education, Labour Market Gap
