Naira Appreciates in Official FX Market, Dips on BMatch
The naira appreciated at the Nigerian autonomous foreign exchange market (NAFEM) as demand pressures shifted to the electronic trading platform BMatch, where authorised dealer banks traded USD-NGN among other currency pairs.
Analysts said daily exchange rates for international payments now depend on where FX users access it. Today, the naira rallied at the Nigerian autonomous foreign exchange market as pressure from increased demand for the US dollar eased.
According to data from the FMDQ platform, the naira appreciated by 0.88%, closing at N1,525 per US dollar in the official market. The naira experienced some fluctuations in the official window.
The local currency slightly depreciated at the beginning of trading but ended stronger, according to investment firm AIICO Capital Limited. Transactions were consummated between N1,500.00 and N1,560.00.
However, the local currency depreciated by 0.6% to N1,549.80 per greenback on the Electronic Foreign Exchange Matching System (EFEMS). This happened despite a solid FX liquidity level in the currency market.
Foreign portfolio investors brought another round of FX inflows into the financial markets to raise bets on Nigerian OMO bills on Monday, where N1.56 trillion worth of papers was sold to local banks and offshore investors.
The exchange rate had nosedived slightly at the beginning of the week in the official window, halting its huge positive movement after the launch of automated FX trading. Depreciated by N5, in the parallel market, the U.S dollar was sold to invisible FX users at N1,595 per due to demand shock.
Market analysts had anticipated that the exchange rate in the informal currency market would continue to appreciate due to developments in the forex market. Data from the Central Bank of Nigeria (CBN) showed the gross balance in the nation’s external reserves rose further to $40.376 billion yesterday amidst uncertainties in the oil market.
Remittances inflows from Nigerians in diaspora have continued to increase ahead of Yuletide, while import levels have slowed down. In the global commodities market, oil prices remained stable as fears regarding the repercussions of the Syrian president’s overthrow diminished.
Market support stemming from Chinese stimulus was expected to enhance demand from the largest global crude buyer. Brent crude was around $72.41 per barrel, and WTI was at about $68.76 at the last look on Tuesday.
In contrast, gold prices rose to a two-week high due to increasing geopolitical tensions and predictions of a third interest rate cut by the Federal Reserve, reaching about $2,691.99 per ounce. #Naira Appreciates in Official FX Market, Dips on BMatch MDAs Risk Zero Allocations Over Non-Appearance at NASS panel – Senate
