Exchange Rates Diverge, FX Spread Slides

Exchange Rates Diverge, FX Spread Slides

The Nigerian exchange rates diverged as Yemi Cardoso took leadership rein at the Central Bank of Nigeria (CBN).  The positive expectation about the new CBN governor reduces demand pressures at the official window for importers and exporters.

Before the Islamic holiday, the Naira traded mixed across FX segments as forex traders saw demand pressure eased at the official window.

Data from FMDQ showed that the naira gained 2.35% against the US dollar to N755.08 on the news of the Senate confirmation of Cardoso as the new CBN Governor.

Now, the gap between official and parallel market exchange rates has reduced to N145, from N150 amidst rising FX speculation in the local market.

However, at the parallel market, there was demand pressure as the local currency depreciated by 0.50% to close at a historic low of N1,000/$1.  Nigeria’s foreign reserves steadied up to date despite higher oil prices.

Elsewhere, WTI crude oil futures rose to $90.7 per barrel on Tuesday, marking their highest level since November on the back of expectations of larger market deficits in the fourth quarter, offsetting concerns regarding a potential economic recession’s impact on oil demand. #Exchange Rates Diverge, FX Spread Slides

Naira Devaluation Deepens Economic Crisis in Nigeria