Naira Appreciates Over Steady FX Supply
The Nigerian local currency continues to reclaim its previously lost value in the foreign exchange (FX) market amidst steady foreign currencies supply in the market. Analysts said the market witnessed a healthy supply at a level that reduce demand pressures.
At the investors and exporters FX window, the exchange rate appreciated to N462 on Thursday despite a further slump in external reserves – exchange rate had crossed N464 amidst demand pressures.
The local currency recorded moderate appreciation at the window although supplies to corporate remain tight as the central bank and offshore players watched from the sidelines.
Amidst the seesaw movement in global price of crude oil, Nigeria’s foreign reserves slumped to about $35.29 billion ahead of Eurobond repayment on July 12, 2023.
In three months, Nigeria will settle its Eurobond obtained from the international debt capital market. The sum of $500 million is expected to leave external reserves to meet the obligation.
Analysts said the expected outflow for settlement of securities from the international debt capital repayment will add additional pressures on FX rates.
Inflows from other FX sources remain unstable, unpredictable and largely intermittent due to capital control and Nigeria’s confusing exchange rate management policy.
In the parallel market, players priced FX rates at ₦748 per United States dollar while oil prices (Brent & Bonny) slid further to close below the $80 threshold on fears of recession.
At the investors’ and exporters’ foreign exchange market or window, Naira opened the week with a gain of N0.23 to close at N463.44.
For strategic reasons in resetting policy direction for the incoming administration, analysts said the apex bank could struggle to conduct a successful FX market. #Naira Appreciates Over Steady FX Supply
