Naira Falls to N1,360 as Interbank FX Turnover Dips by 57%
The naira fell against the US dollar to N1360 at the official window as FX liquidity has declined sharply over the past 24 hours, reflecting tight inflows from exporters, non-bank corporates, and foreign investors.
The local currency has been fluctuating amidst less aggressive forex market interventions by the Central Bank. The market remains confident of adequate FX injections as the authority maintains its stance to keep the local unit stable against the dominant US dollar and other Western currencies.
In its daily FX data, the Central Bank revealed that the spot FX rate weakened to N1,360.0725 on Wednesday from N1,357.1808 per dollar.
Foreign transactions were executed between N1,357 and N1,361.500 during the day, indicating a liquidity shortage in the Nigerian foreign exchange market (NFEM).
Interbank FX turnover reduced to $54.293 million, from $125.686 million the previous day, translating to about a 57% decline in 24 hours at the forex market.
While currency market liquidity continues to swing, Nigeria’s gross external reserves inched higher again, settling at $50.886 billion, its 2009 high, amid sustained inflows from multiple sources.
The oil market receipts contribute significantly to Nigeria’s foreign reserves uptrend, supported by high crude oil production and elevated global commodity prices.
Oil prices are continuing to drop, as hopes rise for a return to stability in global energy markets before the signing of a framework agreement on ending the United States-Israel war on Iran.
Futures for Brent crude due for delivery in August dipped nearly 1% on Wednesday, extending declines of about 5% on each of the previous two days.
The international benchmark stood at $78.24 a barrel, the lowest price since March 3, three days after the start of the war.
After rising more than 50% during the conflict, the price of crude on Wednesday afternoon in Asia was only about 7% higher than before the US and Israel launched attacks on Iran on February 28.
