Naira Dips Vs. Dollar Liquidity Lags Foreign Payments
The Naira closed the week with a slight loss at the official market, trading at N1,343.63 per U.S. dollar, according to daily data published by the Central Bank.
The spot FX rate depreciated from N1342.30 per dollar quoted at the official window on Thursday, reflecting moderate pressure from FX payment requests.
This translated into 0.09 per cent depreciation in the local currency, amid Broadstreet’s positive outlook for the exchange rate. The Naira, which had sustained a two weeks appreciation before crashing on Friday, traded at N1,356.18 on Monday.
Official rate hovered between the intraday high and low of N1348 and N1340, while the CBN report indicates that NFEM interbank liquidity increased to N124.34 million from N74.255 million the previous day.
The local currency posted a strong week-on-week gain amid declining foreign reserves, which stood below $49 billion, down from its 2009 peak of $50 billion.
Global oil prices dropped sharply on Friday after Iran signalled that the Strait of Hormuz would remain open to commercial shipping during a temporary ceasefire in the Middle East.
Benchmark crude prices fell by more than 10 per cent, with West Texas Intermediate (WTI) slipping below $85 per barrel, while Brent crude declined to about $89 per barrel.
The decline follows comments by Iran’s Foreign Minister, Abbas Araghchi, who said commercial vessels would be allowed to transit the strait for the duration of a 10-day ceasefire involving Israel and Lebanon.
The truce, which began on Thursday, is reported to include the Iran-backed group Hezbollah. Oil prices had surged above $100 per barrel in recent weeks amid heightened tensions in the region, with WTI reaching nearly $113 per barrel earlier this month and Brent climbing above $119 in late March.
