Naira Dives Across FX Markets, Exchange Rates Gap Narrows
The Nigerian naira dived across Nigerian foreign exchange markets against the US dollar, reflecting increased demand for offshore payments and other settlements.
The dollar liquidity declined, pushing the intraday rate to N1375 per dollar, while the best rate quoted for the day was N1367 per dollar, according to data released by the Central Bank.
The official rate depreciated to N1373 per dollar, as interbank FX turnover fell to $51.170 million across 67 deals, from $78.150 million at the weekend.
In the parallel market, the spot rate depreciated to N1,395 per dollar amidst liquidity scarcity in the informal segment. Consequently, the spread between both markets narrowed to NGN21.84/USD from NGN32.61/USD on Friday.
Last week, the Naira reversed the depreciation recorded the previous week, appreciating by 1.00% week on week at the official window against the U.S. dollar to close at N1,361.40/US$1.
The currency opened the week at around N1,365.25/US$1 and strengthened further to an intraweek high of approximately N1,355.85/US$1 before settling at its current level.
At the parallel market, the Naira traded flat week-on-week, closing at N1,400.00/US$1. Consequently, the spread between the official and parallel market rates narrowed slightly to 2.84%, equivalent to N38.61/US$1.
Meanwhile, Nigeria’s gross external reserves declined marginally by US$38.11 million to US$48.33 billion, according to data from the CBN.
FX analysts expect the Naira to trade within a relatively stable range, supported by continued CBN interventions, improved foreign portfolio inflows, and sustained market reforms aimed at enhancing liquidity in the FX market. Nigerian T-Bills Yield Slides as Investors Boot Holdings
