Naira Skids as CBN Releases Information on Shadow FX Flows
The Naira experienced a major decline in purchasing power at the official market as US dollar supply tracked below FX demand by eligible users in the autonomous market. The siuation in the forex market remains unimpressive depsite multiple effort of the monetary authority to stabilise the local currency.
Data from the FMDQ platform which provides daily spot rates on currency traded at official window suggested that the naira was in a weaker position in the market as the exchange rate depreciated by 2.08% to N1,615.94 per US dollar.
Conversely, the exchange rate strengthened by 2.46% in the parallel market, closing at N1,588 per US dollar on Tuesday. The gap between the official and parallel market rates is now at N28.
Since security agencies combative measures at the black market, the exchange rate has been improving. FX whales have gone underground having noted the authority will leave no stone unturned to save the local currency.
Large US dollar holders have kept their hands tight on forex to keep the naira under pressure perpetually.
For years, Nigeria has not been able to meet eligible demand for foreign currencies due to the activities of speculators and insiders who continue to make extra ‘bucks’ from illicit currency trading.
The Central Bank recently fingered local banks for infractions, which later resulted in a directive to reduce lenders’ net open position drastically. It was gathered that banks were among those speculating against the naira, boosting the US dollar’s dominance in the market.
In its latest expose, the CBN said a large amount of untraceable FX inflows of more than $26 billion passed through Binance Nigeria. According to analysts, the amount is large enough to kill a local currency since it flows into an underground economy via peer-to-peer cryptocurrency exchange,
Binance, a cryptocurrency trading platform that allows peer-to-peer trading, thus, becomes a shadow economy to channel foreign currencies from Nigeria for various untraceable deals.
In the global commodities market, oil prices experienced a rise on Tuesday, driven by market focus on uncertainty surrounding a potential Gaza ceasefire and expectations of OPEC+ extending voluntary supply cuts in March.
International benchmark Brent crude futures inched up to $83.01 a barrel, while U.S. West Texas Intermediate crude futures (WTI) reached $78.26 per barrel in the global commodity market. #Naira Skids as CBN Releases Information on Shadow FX Flows Oil Prices Increase as China Boosts Crude Buying
