Naira Falls While Nigeria’s External Reserves Cross $41bn
The naira fell against the US dollar at the Nigerian foreign exchange market as trading data revealed a significant surge in foreign currency payments by eligible players. An FX data update from the Central Bank of Nigeria (CBN) showed the local currency fell to N1536.7346 per dollar at the official window on Wednesday over intense demand for the greenback.
The spot rate hit an intraday high of N1538.5000, a significant reversal from N1535.5000 in the previous, reflecting looming pressures at the official window in the absence of dollar support from the CBN.
In a commentary note, analysts at AIICO Capital Limited confirmed that the naira weakened against the dollar due to heightened FX demand and constrained supply.
The local currency traded between ₦1,534.00/$ and ₦1,538.50/$, ultimately depreciating by 12 bps to close at ₦1,536.7346/$. The naira should hold near current levels against the dollar in the coming days, the investment firm said.
In the parallel market, the exchange rate weakened to N1550 per dollar amidst rising demand seen across the currency market. Still, FX gap between the official and parallel markets remained tight, tending below N20. Banks are still selling dollars to customers at N1545 to N1550 in the absence of speculative activities.
Meanwhile, data from the CBN showed that gross external reserves balance has crossed $41 billion again due to sustained inflows from across sources amidst rising oil output and price fluctuation.
In the global commodity market, oil prices rose nearly 2% on Wednesday after U.S. crude inventories posted a sharper-than-expected weekly decline, while investors kept watch on Ukraine peace talks with Russian sanctions still intact.
Brent crude gained $1.02 to $66.81 per barrel, and U.S. West Texas Intermediate climbed 95 cents to $63.30. Meanwhile, gold prices advanced as the dollar weakened and traders looked ahead to the Jackson Hole symposium.
Fed minutes showed only a few members supported a July rate cut. Spot gold rose 0.9% to $3,344.37 per ounce, while U.S. gold futures settled 0.9% higher at $3,388.50.
Oil prices are likely to stay elevated as Russia plans to continue supplying oil to India despite U.S. warnings. Russian officials in New Delhi confirmed this stance and expressed hope for trilateral talks with India and China soon. #Naira Falls While Nigeria’s External Reserves Cross $41bn Nigeria’s Borrowing Cost Eased as African Eurobonds Rally
