Naira Drops Further as Foreign Payments Surge
The naira exchange rate dropped further at the Apex Bank’s official FX window due to increasing demand for foreign payments by eligible market participants.
The spot FX rate weakened for the second day straight, settling at N1341 per dollar at the Nigerian foreign exchange market (NFEM), according to the Central Bank of Nigeria (CBN) update.
Foreign payments increased to a level that US dollar volume at the supply side could not cover, reflecting recent absence of the authority’s FX intervention at the official window.
The CBN reported that the official rate weakened by 0.24% to ₦1,341.35/$ at the NAFEM window amidst growing external reserves.
Meanwhile, the naira strengthened by 1.86% to ₦1,336/$ in the parallel market, indicating differing currency pressures between the regulated official segment and the informal foreign exchange market.
Nigeria’s gross external reserves crossed $48 billion as additional inflows boosted the nation’s buffer to defend its local currency position, according to data from the CBN today.
The external reserves position marked the highest in 8 years, and analysts expect a further surge in anticipation of an increase in oil receipts and a slowdown in oil import payments. Zenith Bank Hits New 12-Month High
Oil prices rallied as the failure of the US-Iranian negotiations to show a more concrete progress rekindled market worries for a possible conflict which in turn could weigh o the supply side of the commodity’s market.
Brent price settled around $69 per barrel, while US West Texas Intermediate (WTI) hovered around $65, latest data from the global commodity market revealed.
The negotiations were for Tehran’s nuclear program, and despite the two sides agreeing to reconvene in a couple of weeks, the escalation of military activity by both sides in the region tended to create worries.
The issue is currently tantalizing the international oil market, and a possible intensification of the market’s worries could boost oil prices further. £Naira Drops Further as Foreign Payments Surge
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