Naira Depreciates to N1507.83 on Weak FX Market Liquidity
The Nigerian local currency, the naira, depreciated further today against the dominant foreign currency, the United States (US) dollar, at the official foreign exchange market on Wednesday on sustained FX supply.
According to data from the FMDQ, where daily spot rates are quoted, exchange rate worsened by N7.04 or 0.47% N1507.83 from N1500.83/$ as surging demand for fx became acid test for Central Bank of Nigeria’s (CBN) willing buyer, willing seller FX idea..
‘Test running forex market with willing buyer, willing seller could be destructive to exchange rate in the country. Nigeria is an import dependent nation, CBN cannot afford to leave spot rate determination to forces of demand and supply
“…For foreseeable future, demand for US dollar would almost always outpace the supply side because of sole reliance on hydrocarbon sales for FX receipts”, a Nigerian economist who prefer not to be mentioned told MarketForces Africa.
The apex bank said this week the $24 billion FX inflows found its ways to the Nigerian economy in the first quarter of 2024. The US dollar flood came from various sources, including Treasury, OMO bills positioning in the financial markets and remittances.
The apex bank has distance itself from condcution FX sales to boost market value of the naira in the official window. The same thing was done at the informal currency market, causing exchange rate to be on depreciating line for over a month straight.
Exchange rate worsened in the parallel market as demand for foreign currency eclipsed the amount available in the supply side. Hence, the Naira closed at N1,500 per US dollar from N1490. #Naira Depreciates to N1507.83 on Weak FX Market Liquidity FMBN Inaugurates Task Teams for Loan Recovery Nationwide
