Naira Rises against US Dollar Ahead of Sept. FX Auction
The Nigerian local currency, the naira, appreciated by 80 basis points against the US dollar in the foreign exchange (FX) market on Monday on the back of sustained demand pressures.
The market is expecting the monetary authority to conducted FX auction in September to stem the negative tide against the naira in the official currency market.
FX challenge has persisted, spurring fast and furious OMO bill sales by the monetary authority ahead of retail Dutch auction sales for Sept.
To boost FX supply in the market, the apex bank has been selling OMO bills in the primary market in fast and furious manner that suggest weakness in net external reserves balance.
MarketForces Africa recalled that the Central Bank of Nigeria (CBN) resumed Retail Dutch Auction System in August as part of efforts to channel foreign currency to FX users.
In the foreign exchange market, the Naira experienced a positive performance against the US dollar at the official market, appreciating by 0.80% to close at ₦1,585.77 per US dollar.
Exchange rate is expected to fall further due to expectation that the external reserves would likely take additional hit as a result of $6 billion debt owe by NNPCL to fuel suppliers.
The Naira saw further demand pressure as it depreciated by 0.31% to ₦1,625 per US dollar in the parallel market. Data from the Central Bank showed that external reserves declined further $36.321 billion following successive outflow in August, 2024.
Crude oil prices extended losses In the global commodity market due to higher OPEC+ production in October and a sharp drop in output from Libya, along with sluggish demand in China and the U.S.
However, the market rebounded towards the close of trading. Brent prices increased by 0.62% to $76.71, while WTI prices gained 0.94% to reach $74.24. Gold prices also increased by 0.22% to $2,533.10 per ounce. #Naira Rises against US Dollar Ahead of Sept. FX Auction
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