Naira Reclaims Value Amidst Unstable Forex Gyration
The Nigerian local currency, the Naira, reclaimed significant value in a battle against the dominant foreign currency, the US dollar at the investors, and exporters’ foreign exchange window on Monday.
After losing weight in the past week, the local currency appreciated against the US dollar by 3.61%, trading at N741.50 at the investors’ and exporters’ foreign window while the authority search for convergence.
The exchange rate had printed at N769.25 per greenback at the close of business on June 30, according to data from the FMDQ Exchange platform. Traders said the open indicative rate closed at N760.39 to one dollar on Monday.
An exchange rate of N792 to the dollar was the highest rate recorded within the day’s trading before it settled at N741.50.
The Naira sold for as low as N696.37 to the dollar within the day’s trading. A total of 88.68 million dollars was traded at the investors’ and exporters’ window on Monday. On the other hand, the exchange rate weakened in the parallel market.
Parallel market currency traders sold the US dollar to customers at N775, representing a 0.26% depreciation from N773 spot rate on Friday’s close. Accretion into external reserves remained subdued despite improvement in the oil exports record in June 2023.
Nigeria recorded some modest progress with oil exports in Junes holding strong from key streams, although it is pumping much less than allowed under the Organization of Petroleum Exporting Countries, OPEC+ production cut deal.
The OPEC oil output fell slightly in June as increases in Nigeria and Iraq limited the impact of cutbacks by others, despite a wider OPEC+ deal and voluntary cuts by several members to support the market, a Reuters survey found.
At the close of business, Nigeria’s gross external reserves settled at $34.11 billion, with a liquidity portion below $34 billion. Elsewhere, oil market made a moderate recovery amidst instability in the global economic performance.
Brent crude rose 0.15% to $75.53 per barrel, while WTI crude gained 0.20% to $70.78 per barrel. Oil futures were higher on Monday, as supply constraints resulting from Saudi Arabia’s and Russia’s planned August output cuts weighed on the market.
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