Naira Mixed as US Dollar Inflows Sink by 15%
The naira traded on mixed note in the foreign exchange markets as data from FMDQ platform showed that US dollar inflows decline by about 15%. The naira exchange rates appreciated in the official window and depreciated at the electronic trading platform amidst continuous search for the local currency true value.
At the Nigerian autonomous foreign exchange market, NAFEM, the naira appreciated by 0.38% as demand pressure eased, closing at N1,544.05 per US dollar on Tuesday.
Transactions were conducted within the range of N1,510 and N1,560 per US dollar on the back of sufficient FX liquidity. Despite exporters FX inflows at the official market last week, data showed that volume of US dollar retreated.
The NAFEM window recorded an inflow of US$1.04 billion, down by about 15% from US$1.22 billion in the previous week, Coronation Merchant Bank Research unit said in a report.
The breakdown showed that the Central Bank of Nigeria (CBN) accounted for 1.65% of the total inflow, foreign portfolio investors supported the supply side significant, accounted for 39.66% of the inflows.
In addition, non-bank corporates contributed 37.08% of total US dollar volume in the official market while exporters contributed 19.24%. FX inflows from other sources was 2.37% of aggregate US dollar volume in the market as of Friday.
Euphoria of strong transparency and liquidity eased on Bloomberg BMatch as the naira lost weight against the US dollar. FX spot rate depreciated by 0.7% to N1,553.19 per greenback in the Electronic Foreign Exchange Matching System (EFEMS) according Cordros Capital Limited.
Elsewhere, Oil prices decreased as China’s economic figures raised concerns about demand, while investors stayed cautious ahead of the U.S. Federal Reserve’s decision on interest rates. Brent crude was approximately priced at $73.12 per barrel, whereas WTI was around $70.27 as EU sanctions additional 52 Russian tankers.
Also, Gold faced downward pressure from a strengthening U.S. dollar and rising Treasury yields as investors concentrated on the Federal Reserve’s last policy meeting of the year, with increasing expectations for a gradual pace of rate cuts in 2025. Gold was trading close to $2,636.89 per ounce. #Naira Mixed as US Dollar Inflows Sink by 15% Tax Reforms: Tinubu Won’t Undermine Democracy- Information Minister
