Naira Skids as Volume of US Dollar Traded Rises to $160m
The Nigerian naira skidded at the official window amidst US dollar and other foreign currency demand pressures. The local currency depreciation has now pushed both official and informal markets spot rates near each other.
In the Nigerian autonomous foreign exchange market, traders exchange one US dollar for N1,416.57, translating to a depreciation of 4.60% from N1,354.21 quoted by FMDQ Securities Exchange platform in the previous day.
However, the total daily turnover increased to 160.77 million on Tuesday, up from 84.83 million dollars recorded on Monday.
In the parallel market, the Naira closed at ₦1,415 per US dollar despite FX sales to Bureaux de Change operators in the informal currency market.
In the global commodity market, crude oil prices experienced a decline, with the Brent crude dropping by 0.68% to trade at $82.76 per barrel, and the West Texas Intermediate (WTI) crude oil also declining by 0.81% to trade at $77.85 per barrel.
Nigeria’s foreign reserves maintained an uptrend, hitting $32.30 billion, according to latest update on Central Bank of Nigeria (CBN) website.
The naira remained volatile in the FX market, largely reflecting weak capital inflows and subpar interventions from the CBN, according to Cordros Capital Limited.
As concerns about the escalation of the Middle East conflict are waning, analysts highlight that the moderation of yields on naira-denominated assets amid elevated global interest rates are further discouraging foreign portfolio investment (FPI) inflows.
With the CBN maintaining a relaxed stance on its monetary tightening measures and considering the persisting uncertain geopolitical environment, analysts at Cordros Capital said they anticipate FPI inflows will remain subdued. Consequently, the naira is expected to remain under pressure in the short term.
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