Naira Falls for Sixth Day on Regulator Choice
Slow but steady, the Nigerian local currency, the naira, continues its downward trajectory for the sixth consecutive day, largely driven by FX liquidity shortfall in the official window.
The sustained decline in the naira’s value is driven by a foreign currency shortfall in the market and illustrates the direct impact of regulatory choices on the local currency position.
The Central Bank of Nigeria (CBN) has paused FX intervention to manage the exchange rate amid foreign portfolio investors, exporters, and non-bank corporate inflows continuing to drive the supply side.
Market analysts said the authority is comfortable with the slow depreciation of the local currency as Nigeria seeks to avoid capital flight amid the recent fast-and-furious gains.
The Apex Bank has a signal preference for slow naira appreciation at the official FX window and has started buying US dollars to weaken supply.
For the Apex Bank, the naira is trading within its comfortable band, data showed the spot rate hovered between N1351 and N1361 per dollar during the intraday trading session.
The naira weakened across both exchange channels on Wednesday, depreciating 0.05% to ₦1,356.11/$ at the Nigerian foreign exchange market, data published by the Central Bank revealed.
The exchange rate also declined to N1365 per dollar in the parallel market, reflecting renewed currency pressures across both the regulated official segment and the informal foreign exchange market.
