Naira Depreciates Market Wide Despite CBN FX Sales to Banks
The Nigerian naira continues to fluctuate negatively amidst tight liquidity condition in the currencies markets. Exchange rates worsened at official and parallel markets as demand pressures persisted on Wednesday.
According to spot FX data, the naira lost N2.53 on each US dollar paired in the official market to close at N1538.67 on Wednesday despite Central Bank intervention sales. The monetary authority sold US dollar to authorised dealer banks yesterday to boost the FX levels at the supply side amidst surging demand.
The CBN sold $59.7 million within the N1,532 – N1,540 range. Throughout the session, AIICO Capital Limited said the USD/NGN pair traded between N1,532 and N1,550, resulting in a 16-basis-point depreciation of the Naira, which closed at ₦1,538.68.
The latest pressures on the naira emanated from round of US dollar demanded by some foreign interest and Nigeria’s debt servicing costs. At the parallel market, the naira dropped by N5 to settle at N1,580 per greenback over relative scarcity of foreign currencies.
At the current level, analysts said FX spread between the two markets widened to 2.69% from 2.53%, creating speculative risks for the CBN to handle. Nigeria’s gross external reserves continue to decline due to sustained outflow, and limited FX receipts from various sources include oil exports.
Latest report has revealed that the country’s average daily crude oil production fell below the quota allocated by the Organisation of the Petroleum Exporting Countries.
Oil production figures released by the Nigerian Upstream Petroleum Regulatory Commission showed that the country’s crude production fell to approximately 1.47 million barrels per day in February, down from 1.54mbpd in January. In the global commodities market, oil prices climbed 2% on Wednesday after U.S. government data revealed a tighter-than-expected decline in oil and fuel inventories.
However, concerns over a potential U.S. economic slowdown and tariff-related uncertainties limited gains. Brent crude futures rose $1.39, or 2%, to $70.95 a barrel while U.S. West Texas Intermediate crude gained $1.47, or 2.2%, to $67.72.
Also gold prices advanced as uncertainty surrounding tariffs and a softer inflation report bolstered expectations for a U.S. rate cut. Spot gold was up 0.7% at $2,934.93 an ounce while U.S. gold futures also increased 0.7% to $2,942.50. #Naira Drops Market Wide Despite CBN FX Sales to Banks NEM Insurance Steadies at Fair Discount to 52-Week High
