Naira Falls on FX Liquidity Shortfall, NFEM Turnover Dips
The naira weakened further across the official and parallel markets on Tuesday. The local unit depreciated by 0.01% to ₦1,373.87 against the US dollar at the Nigerian foreign exchange market (NFEM) window as pressures persisted.
The spot rate depreciates as demand for international payments exceeds liquidity in the forex market, absent significant FX intervention on Tuesday. traders said in their separate briefs.
In the market, transactions were closed between N1370 and N1374.99 at the NFEM window during the day, and the window also recorded $72.423 million in FX turnover across 76 deals, down from $76.296 million.
The last two weeks’ trading details signal that local currency is under intense pressure from increasing demand for hard currency, especially the US dollar.
In the parallel market, the naira dropped to N1,395.00 per dollar amid liquidity concerns in the informal segment. The trend reflects broad-based selling pressure on the local currency across both the official and informal foreign exchange segments.
As a result, the market spread moderated slightly to NGN21.13/USD from NGN21.30/USD yesterday. Nigeria’s external reserves expanded to USD48.68 billion from USD48.58 billion previously, driven by fresh FX receipts from crude oil sales and remittances.
The global commodity market remains under pressure due to supply and demand imbalance. Oil prices fell following US President Donald Trump’s announcement of a halt to a planned military strike on Iran to facilitate negotiations aimed at ending the Middle East conflict.
Brent futures for July had decreased by $1.73, or 1.5%, to $110.37 per barrel (bbl), reported. Meanwhile, US West Texas Intermediate (WTI) crude for June delivery, expiring on the same day, fell by $0.63, or 0.60%, to $108.03/bbl.
The July contract, which is more actively traded, declined by $0.82, or 0.8%, to $103.56/bbl. In the prior session, Brent and WTI reached their highest points since 5 May and 30 April, respectively.
In the US, data showed a drawdown of 9.9 million barrels (mbbl) from the Strategic Petroleum Reserve, reducing stockpiles to approximately 374 mbbl, the lowest level since July 2024.
The conflict in the Middle East has led to the closure of the Strait of Hormuz, a strategic passage that usually transports around 20% of global oil and liquefied natural gas (LNG).
On Monday, Trump announced on social media that he was delaying a planned military strike on Iran set for Tuesday, pending ongoing negotiation efforts. He noted that the US was prepared to resume military action if an agreement was not achieved. FirstHoldco Climbs on Significant Trading Volume Worth N1bn
