Naira Depreciates as High USD Demand Weighs on FX Rates
In the foreign exchange market, the Naira depreciated at the Nigerian Autonomous Foreign Exchange Market (NAFEM) window, closing at N795.41 per US dollar. The decline in the value of the local currency was driven by an imbalance created by forces of demand and supply.
On the demand side, importers and local manufacturers’ FX demand logged in the market surged past the total amount available, a market situation that forced the exchange rate upward.
On the supply side, the Central Bank of Nigeria (CBN) has slowed down market intervention after the devaluation of the local currency in the first half of 2023. Higher oil prices have failed to drive external reserves higher than market expectations.
Though the authority has moved to clear FX forward backlog, market sentiment has continued to be clouded by the visible impacts of the US dollar shortage in the economy.
The US dollar hit an overbought range which caused a reversal in the naira exchange rate on Friday, MarketForces Africa. Weak market intervention has kept exchange rates on the high side across the market.
In the parallel market, the Naira also depreciated by 1.79% to N1,140 per dollar after inviable hands holding the exchange rate down was lifted.
In the global commodities market on Monday, oil prices surged amidst tight supply. Brent crude increased by 0.69% to $82 per barrel, while the West Texas Intermediate (WTI) crude oil also rose by 0.48% to $77.54 per barrel. #Naira Depreciates as USD Demand Weighs on FX Rates Investors Stake N653bn on Nigerian Sukuk -DMO
