Naira Tumbles over Weak FX Supply
As demand eclipsed market supply, more Nigerian naira was required to obtain a United States (U.S.) dollar across foreign exchange (FX) markets on Tuesday, according to FMDQ Exchange data.
The exchange rate continues to face pressures from US dollar domination due to a sustained imbalance between the demand and supply of foreign currencies in the official and parallel markets.
At the Investors, Exporters FX window, the naira weakened against the greenback, trading lower at N464.42 spurred by increasing bids from the market rate of N463.50.
Similarly, the parallel market depreciated by 0.06% to N761 from N760 as demand for invisible began t filter into the open space after a 50% reduction in foreign currency allowance to local FX users for business and personal needs.
With Dangote Refinery’s output coming to the market in the second half, some FX analysts told MarketForces Africa that the outlook for the naira would improve – albeit not significantly- in the short term.
The refinery that becomes operational this week will help Nigeria reduces FX spending associated with oil and gas imports. This will boost external reserves and strengthen the local currency. # Naira Tumbles over Weak FX Supply
