Exchange Rates Weaken over Softening Naira Demand
The naira depreciated across the official and unofficial currency markets due to a US dollar shortfall after recent rounds of FX interventions by the Central Bank. The exchange rates shift came as demand for naira softened in the absence of foreign investors’ activities in the financial markets.
On the other hand, the market is witnessing rising demand to settle year-end imports amidst a slowdown in FX inflows. It takes CBN FX sales for the naira to gain traction in the market recently.
The spot rate at the official FX market has been fluctuating, and the negative tide has been subsided by series of US dollar supply by the Apex Bank. The narrative appears the same in the black market given that banks and bureau de change are closely competing on FX quotes.
Updated FX data released by the Central Bank on Thursday showed that the naira weakened by 0.07% to ₦1,443.90 per dollar in the official window.
The spot rate touched an intraday high of N1446 per dollar, which is a slight depreciation against the previous day quote of N1446.5000.
The market condition was helped by the latest FX sold to banks by the CBN. On Tuesday, the Apex Bank intervened with $36.6 million to boost the supply side, helping to redirect the exchange rate at the official window.
Meanwhile, some transactions were closed at an intraday low of N1442 per dollar, which was worse compared with N1436.5000 intraday low quoted on Wednesday.
In the parallel market, the naira declined by 0.17% to ₦1,475/$, reflecting renewed pressure and softening sentiment toward the local currency in both the regulated official segment and the demand-driven informal market. Central Bank Supports Naira with $36.6m FX Intervention
