Naira Plummets as FX Demand, Supply Remains Imbalance
The naira plummeted in the foreign exchange market on Wednesday as demand and supply sides remained imbalanced in the absence of FX intervention. Spot data revealed that the naira depreciated by 0.34%, closing at ₦1,539.40 per US dollar in the official market. The Central Bank has slowed down its aggressive FX sales to banks.
This has reduced the supply-side strength in the official market amidst rising demand for foreign payments and related transactions.
The Nigerian foreign exchange market maintained a stable position today, supported by enhanced liquidity. The market was fully bid as suppliers aimed to sell their proceeds at better prices. Transactions occurred within a range of N1,537.00 to $/₦1,545.00. Ultimately, the NFEM settled at N1,539.3976, indicating a depreciation of 34 bps in comparison to the previous
This represents a slight loss as the local currency traded on Tuesday at N1,534.16 per dollar. Also, data from the FMDQ Security Exchange official forex trading platform revealed that the Naira opened trading on Tuesday at N1,535.50 to a dollar but closed at N1,541.70 on Wednesday.
However, trading on the Investors and Exporters (I&E) Forex window on Wednesday recorded a high of N1,544.00 and a low of N1,535.50. in the parallel market, it ended the day at ₦1,644 per dollar, losing N4 per greenback due to demand pressures that started midweek after previous exchange rate recalibrations.
Oil prices declined as the dollar gained strength but received some support from a reduction in supplies from Russia and other OPEC nations, along with a decrease in U.S. crude inventories. Brent crude was priced at $76.68 per barrel, and WTI was around $73.94.
Similarly, gold prices increased, reaching a near four-week high after a weaker-than-expected private employment report for December reassured some market participants that the U.S. Federal Reserve might be less cautious about lowering rates this year. It traded at about $2,663.79 per ounce. #Naira Plummets as FX Demand, Supply Remains Imbalance Nigeria Treasury Bills Yield Steadies Ahead of Auction
