Naira Declines US Dollar Demand Exceeds FX Supply
Naira, US Dollar

Naira Declines US Dollar Demand Exceeds FX Supply

The Nigerian Naira depreciated against the United States dollar on Monday as demand for foreign currencies accelerated ahead of FX supply in the market, exchanging N461.50 at the investors’ and exporters’ foreign exchange window.

The rate represented a decrease of 0.04 per cent when compared to the N461.33 for which it exchanged to the US dollar before the close of business on Friday, according to data obtained from the FMDQ Exchange platform.

The open indicative rate closed at N461.75 to the dollar on Monday. An exchange rate of N462.42 to the dollar was the highest rate recorded within the day’s trading before it settled at N461.50.

The Naira sold for as low as N460 to the dollar within the day’s trading. A total of 101.77 million US dollars was traded at the official investors’ and exporters’ window, according to traders.

The market experienced disequilibrium with accelerated demand and lower inflows support levels – amidst low inflow from export receipts and rising demand by manufacturers with eligible requests for import bills financing.

Sticking to the trading pattern observed over the long period, the naira weakened against the greenback, trading lower at N461.50 (from N461.33) at the official window for manufacturers, and exporters.

However, the parallel market gained 0.13% to N745 (from N746). The gap between the open and the official market rate is currently below N300, though it has crossed the line a few weeks ago.

Data from the apex bank gathered and reviewed by MarketForces Africa shows that after falling for 10 weeks, gross external reserves declined by about 3% today, settling at $35.74 billion.

Brent crude rose 1.73% to $76.29 per barrel, while West Texas Instrument (WTI) crude gained 1.66% to $70.41 per barrel.  Due to low inflow into foreign reserves amidst the rising need for FX market intervention, Nigeria’s foreign reserves has maintained about a 3% decline in the first quarter.

Oil futures rose today driven by increasing investor risk appetite and authorities’ efforts to boost confidence in the global banking sector’s stability.  

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