Naira Tumbles as FX Liquidity Challenge Persists
The Nigerian naira crashed further on Monday due to sustained US dollar scarcity challenges and rising forex demand. The authority’s thinking or expectation is not clear as the exchange rate continues to weaken in a country that depends more on imports.
The central bank has distanced itself from FX sales to authorised dealers to reduce pressure on the naira, which has lost significant value in the last 12 months. On the other hand, the exchange rate has inched around its fair value when considering the sustained decline in gap between official and informal FX market rates.
“The naira spot rate is unlikely to rebound without strong FX liquidity in the Nigerian autonomous foreign exchange market”, analysts said.
According to data from FMDQ platform where daily FX spot rates are quoted, the naira closed at ₦1,523.85 per US dollar, representing a 0.94% depreciation from the previous close.
Again, the exchange rate also worsened at the informal currency market. Traders reported that the naira depreciated by 0.33% in the parallel market, ending the day at an average of ₦1,528 per greenback as demand for invisible FX transactions increased.
In the global commodity market, oil prices declined as Brent crude decreased by 0.82% to $86.26 per barrel, and West Texas Intermediate (WTI) crude also fell by 0.83% to $82.74 per barrel on Monday. #Naira Tumbles as FX Liquidity Challenge Persists
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