Naira Falls in Absence of FX Sales to Boost Dollar Supply
The naira fell again, settling at N1473.2943/$ at the official window in the absence of Central Bank of Nigeria (CBN) FX intervention sales to support rising demand for US dollar.
The local currency has maintained a downward trend since the beginning of the week when it opened at N1455, traded at N1473 per dollar at the official window as demand eclipsed aggregate market supply.
But updated FX data from the CBN showed that the local currency spot rate touched an intraday high of N1479 per dollar at the official window on Wednesday.
CBN’s FX data showed that spot rate hit N1427, the lowest rate seen in months, reflecting sharp fluctuation in US dollar demand.
With thin supply side, the naira lost ground against the dollar, falling 0.68% to ₦1,473.29 at Nigerian foreign exchange market, reflecting diminished appetite for the local currency. Conversely, the naira gained 0.54% in the parallel market, closing at ₦1,488.
The CBN FX sales to banks has slowdown sharply as exporters and foreign portfolio investors (FPIs) inflows flooded the currency market. Nigeria’s gross external reserves maintained uptrend despite uncertainties in the global commodity market..
The total balance in the nation’s foreign reserves surged to $42.632 billion as of October 13 from $42.589 billion on Friday’s close. Analysts are anticipating that exchange rate will improve as inflation fell below 20%, settling at 18.02% in September, according to data released by the statistics office today.
Commenting on this, investment firm CardinalStone said the ongoing disinflationary trends bode well for currency valuation. Combined with a sustained current account surplus and a steady build-up in FX reserves, this is expected to underpin further Naira appreciation. “
We project FX to close the year within the range of N1,400.00/$-N1,450.00/$”, the firm added. #Naira Falls in Absence of FX Sales to Boost Dollar Supply AXA Mansard Jumps by 12% as Investors Bet on Earnings Outlook
