Daily FX Update: Naira Depreciates as US Dollar Outflow Surges
The Nigerian naira depreciated against the US dollar at the official window as demand and supply imbalance widened on rising foreign payment.
The local unit dropped to N1,334.7233 to the US dollar at the Nigerian Foreign Exchange Market (NFEM) window, from N1,333.6467 with data showing increased FX activities at the interbank window.
Daily FX data released by the Central Bank showed that intraday transactions were conducted at the official window between N1333 and N1337, suggesting foreign payments pressure eclipsed market supply strength.
NFEM Interbank FX turnover surged by more than 100% to $127.628 million, according to CBN updated data, from $60.715 million reported the previous day.
The market anticipates that the naira could see year end pressure but the strong FX inflow and Central Bank would provide support.
Overall, the dollar rose 0.08% to N1,334.72, the pound rose 0.17% to N1,787.73, and the euro rose 0.13% to N1,499.29.
In the parallel market, the dollar fell 1.09% to N1,355.00, while the pound rose 0.28% to N1,810.00 and the euro rose 0.67% to ₦1,505.00. The gap between the two markets narrowed to c.1.52% from about 2.73%.
Uncertainties perist in the global commodcity market. Gold fell 0.18% to US$4,147.30/oz. Year to date, gold is down 4.82%. Brent crude rose 0.11% to US$108.77/bbl and stayed above US$100, as US oil stocks fell and there is still no US-Iran dialogue. Year to date, oil is up 78.75%
