No Respite for Naira as Official, Parallel Market Rates Plunge
The bleak outlook for the Nigerian local currency, the naira, has failed to fade as exchange rates worsened across the foreign currency market during the midweek trading session. The Naira lost ground against the US dollar in the official market, falling by 0.90% to close at ₦1,625.88, according to data from the FMDQ platform.
Data from the Central Bank of Nigeria (CBN) is now showing that external reserves climbed for the first time since August 8, 2024. Nigeria recorded $30 million in FX inflows, and the sum lifted the gross external reserves balance to $36.274 billion ahead of retail Dutch auction FX sales in the current month.
Analysts said the increase balance in the foreign reserves may not be unconnected to recent OMO bills auction. The monetary authority has raise N2 trillion from OMO bills allotted to foreign and local investors at the primary market.
OMO bill sales were necessitated to drive FX inflows into the official channel, analysts view the options as CBN indirect policy to keep the foreign currency market saturated. Unfortunately, the end result has not been impressive as the naira continues to lose value against the dominant US dollar in the forex market.
Also, the apex bank has not been consistent with naira defense through FX auctions to authorised dealer banks. And also, Bureau de Change (BDCs) operators have been left outside a plan to unify exchange rates at both markets. This has made exchange rate price discovery process a difficult task and a tall ambition,
In the informal currency market, the naira exchange appreciated by 0.5% to close at ₦1,625 per dollar. Spot rate movement has been negative due to growing demand for US dollar as a result of seasonal demand for foreign currency in Nigeria.
Elsewhere, oil prices showed a negative trend in the global commodities market, with Brent crude trading at $72.74 per barrel and WTI at $69.36 per barrel on Wednesday. #No Respite for Naira as Official, Parallel Market Rates Plunge Ghana Private Sector Returns to Growth in August – PMI
