Naira Falls to N1,443 as FX Shortage Lingers
The naira fell against the US dollar at the Nigerian Foreign Exchange Market (NFEM) on Wednesday as FX liquidity shortfall persisted. The local currency has been falling in value since the beginning of the week. So far, the exchange rate has worsened by N7/$ in the last three days.
The authority’s decision to intervene with $5 million FX sales to banks was considered a red signal that demand has outpaced total FX supply at the official window.
The Apex Bank FX injection has been minimal and erratic due to increasing FX inflows from foreign portfolio investors and exporters. But past two weeks have been different,
FX inflow into currency market has fallen from peaked of $1.37 billion to $899 million. According to FX update released by the Central Bank of Nigeria (CBN), the official naira spot rate weakened by 0.30% to ₦1,443.08/$.
The spot rate touched an intraday high of N1444.85, which is a significant drop from N1440.89 quoted the same period yesterday. The CBN update showed that the best intraday foreign payment deals were closed at N1438 per dollar, representing a N2 depreciation on the day.
In the parallel market, the naira also declined by 1.37% to ₦1,460/$, reflecting increased demand for the greenback by unofficial FX users category.
External reserves climbed to $43.396 billion on Tuesday, up from $43.366 billion the previous day, as new inflows found their ways into the Nigerian economy. #Naira Falls to N1,443 as FX Shortage Lingers
