Exchange Rates Gap Narrows as Naira Depreciates to N1509.45
The naira exchange rates worsen further across forex markets on Tuesday as the apex bank remained unfazed about the local currency’s two-week free fall. The exchange rate worsened in the official window for eligible FX demand.
Likewise, demand pressure was seen in the informal currency market at the same time. While both markets have seen a higher degree of naira depreciation in recent times, it appears that this has brought the market close to unification.
According to FMDQ spot FX rate data, the naira weakened against the US dollar by 0.03% in the official Nigerian autonomous foreign exchange market, closing at ₦1,509.45 per US dollar.
At the parallel market, the naira closed at N1,508 per greenback due to rising demand for invisible transactions, according to a channel check conducted by MarketForces Africa.
Last week, the NAFEM rate traded within the range of N1,401- N1,577, closing at N1,505.3 in the spot market on Friday. MarketForces Africa reported that the exchange rate weakened by -1.3%, or N19.80 kobo amidst the FX liquidity crisis at the weekend.
The exchange rate movement, however, narrowed the gap between the NAFEM and the parallel market rate to less than N2 on the US dollar. According to data from FMDQ, the total volume of US dollars in the official window increased by +57.8%, or USD378.4 million, to close at USD1 billion on Friday.
In its market note, Coronation Research said the NAFEM window recorded an inflow of USD 336.4 million last week. However, there was no inflow from the CBN for the third consecutive week.
The firm said foreign portfolio investors (FPIs) accounted for 17.3% of US dollar volume, non-bank corporates contributed 36.5% to the FX supply in addition to 39% US dollar volume from exporters, while others FX sources accounted for 7.3%.
External reserves continue to climb amidst rising crude oil prices in the global commodity market. Today, oil prices increased again. Brent crude rose by 0.26% to $86.82 per barrel, and WTI crude advanced by 0.15% to reach $83.50 per barrel. #Exchange Rates Gap Narrows as Naira Depreciates to N1509.45 FMBN Inaugurates Task Teams for Loan Recovery Nationwide
