Naira Rises by 19% as Forex Market Pressures Ease
The Nigerian naira has continued to reclaim lost value in the foreign exchange (forex) market, settling at about N875 per United States (US) dollar, according to data from the FMDQ platform.
At the beginning of the week, the spot FX rate at the Nigerian Autonomous Foreign Exchange Market (NAFEM) had depreciated to N1089 due to a large imbalance between FX demand and supply.
FX supply in the market has continued to fall below the pre-pandemic position and lately, the Central Bank of Nigeria has halted market intervention. Despite this, the naira’s survival record has remained solid, though demand often pushes the rate to a ditch.
According to traders, the Naira displayed mixed performance in the forex market. Against the US dollar, the Naira appreciated by 19.17%, closing at N874.79 per dollar in the official market.
However, in the parallel market, the local currency experienced a 1.45% depreciation day-on-day, closing at N1,257 per dollar. FX spot rate movement at the black market continues to hover below N1300, far below official rate volatility.
In 2024, some analysts believe that FX illiquidity is likely to persist in the short term as foreign capital into the country remains constricted. The government has however indicated a plan to borrow foreign currency to support its spending plan. In all, analysts are projecting no to good rate for the year.
In the global commodity market, WTI crude futures rebounded by over 2%, reaching $72.89 per barrel, while Brent Crude traded at $78.05 per barrel. Naira Lost 11% as Banks Issue New Update on FX Spending
The resurgence has been driven by concerns over shipping security following an armed group’s attack on an oil tanker in Oman, escalating fears of a potential Middle East conflict amid the Iran-US sanctions disputes. #Naira Rises by 19% as Forex Market Pressures Ease
