Naira Falls as FX Pressure Heats Up across Currencies Markets
The Nigerian naira fell against the US dollar across the currency markets as demand pressure heated up exchange rates. The local currency fell to ₦1,536.15 while the parallel market rate depreciated to N1,580, according to data obtained from the FX markets.
The naira has given up recent gains as the local currency reacted negatively to surging demand for the US dollar by foreign investors and debt service payments. The exchange rate came under pressure on Tuesday due to heightened demand for the dollar against a backdrop of limited supply.
The US dollar-naira pair fluctuated between ₦1,520 and ₦1,540 in the official markets before it closed at N1536.15, AIICO Capital Limited said. According to the data obtained from FMDQ, total inflows into the foreign exchange market declined by 12.9% to USD4.12 billion in February from USD4.74 billion in January.
This was driven by a broad-based decline across foreign and local inflows, with CBN contribution down by 36.3%. Meanwhile, analysts expect the Central Bank to sustain its support for the naira to drive recovery amidst a successive decline in external reserves balance.
Nigeria’s foreign reserves fell to $38.35 billion amidst uncertainties in the global commodities market, putting pressures on oil export receipts. Oil prices inched higher on Tuesday, supported by a weaker dollar, though gains were limited by concerns over a U.S. economic slowdown and the impact of tariffs on global growth.
Brent crude futures rose 36 cents, or 0.5%, to $69.64 a barrel after touching a session low of $68.63. U.S. West Texas Intermediate crude climbed 28 cents, or 0.4%, to $66.31 following earlier declines.
Meanwhile, gold prices gained 1% as a softer dollar and economic uncertainty fuelled safe-haven demand, with investors awaiting inflation data for rate outlook clues. Spot gold rose 1% to $2,919.29 an ounce, while U.S. gold futures increased 0.9% to $2,926.30. #Naira Falls as FX Pressure Heats Up across Currencies Markets Naira Exchange Rates Switch Positions in FX Markets
