Naira Falls Slightly as Market Normalises CBN FX Interventions
The naira fell against the US dollar, albeit at a slow pace, due to successive FX intervention supports by the monetary authority. Exchange rates across the official and parallel markets are also inching to converge, though with intermittent fluctuation around N1600 range.
In the Nigerian Foreign Exchange Market (NFEM)—which the Central Bank said is derived at Volume Weighted Average and stands as the official exchange rate for the day—the naira lost ₦0.70 to close at $/₦1,604.48 from N1603.78 the previous day.
Last Friday, the CBN intervened yet again, selling $167 million, bringing the total FX sales for the week to $801.85 million. Again, the Apex Bank sold an additional $150 million to ease pressure on the naira while external reserves bore the brunt.
The forex market now expects the authority to sell dollars to slow down the naira’s falling rate. Data from the CBN revealed that gross external reserves fell to $38 billion. Analysts said Nigeria’s FX receipt faces significant threat due to uncertainties in the global oil market
“To provide support, the CBN intervened with a sale of $150 million at rates between $/₦1,593.20 and $/₦1,623. Throughout the session, the USD/NGN pair moved within a range of $/₦1,593.10 to $/₦1,630″, AIICO Capital Limited reported.
A slew of analysts maintained that the local currency will trade range-bound with the CBN FX intervention until global dust is settled. Foreign portfolio investors exit triggered increased demand for the US dollar, and this put pressure on the naira, which has been struggling with a dislocated economic structure. #Naira Falls Slightly as Market Normalises CBN FX Interventions Climate Change Threatens 83% of Africa’s Jobs — ECA
