Naira Crashes against US Dollar, FX Gap Moderates
The Nigerian naira gave up struggling momentarily against the dominant US dollar in the official market in the midweek trading session in the forex market. The local currency had scored some goals recently as a result of lower FX demand pressures in the informal currency market.
Surging demand at the Nigerian autonomous foreign exchange market (NAFEM) caused naira to depreciate to a level it had breached. For companies, old wound of higher exchange rate persists on their books. FX users that cannot scale back on imports continue to groan under the load of FX losses that have been damaging earnings performance.
The apex bank denied defending the naira but announced sales of $10,000 to 1,538 bureau de change operators (BDCs) at N1021. Analysts maintained that irrespective how the Central Bank of Nigeria (CBN) sees it, the local currency is enjoying its FX sales intervention in the parallel market.
This week, gross external reserves of the CBN climbed to $32.211 billion, providing more than six months import cover based on trade records. Nigeria’s foreign reserves had dropped to $32.106 billion last week before climbing again this week.
The moderate increase was attributed to remittances amidst tight price performance in the oil market. Oil prices experienced a mixed outcome in the global commodity market. Brent crude increased by 0.07% to close at $88.52 per barrel, while WTI crude saw a decline, dropping by 0.16% to $83.33 per barrel.
According to information from FMDQ Securities Exchange, the Naira experienced a 0.64% depreciation against the US dollar, concluding at ₦1,308.52 at the official rate on Wednesday. In the parallel market, the US dollar was to invisible FX users at ₦1,305.
Now, exchange rates gap between official and informal market rates settle at N3. # Naira Crashes against US Dollar, FX Gap Moderates #Sell Pressure: FBN Holdings Loses Nearly Half of Its Market Value
