Naira Plunges, Foreign Reserves Hit $36.24 Billion
The naira exchange rate plunged despite FX market intervention sales at the informal and official currency trading markets on Tuesday. Ever rising demand for foreign currency put pressure on spot rate at the official window.
This happened after the apex bank sold US dollars to authorised dealers on Monday, suggesting that the market’s FX scarcity challenge has deepen. According to information obtained from the FMDQ platform, the naira closed at ₦1,548.76 per US dollar, depreciating by 3.23% from the previous close.
This reversed 6.05% exchange rate surge in the currency market at the beginning of the weak as the Central Bank of Nigeria (CBN) defended the naira position in the forex markets.
In the parallel market, the naira weakened by 0.65%, ending the day at an average of ₦1,545 per US dollar due to demand pressures. This is coming after the apex bank approved FX sales to currency traders at the informal FX market.
As of July 18, 2024, external reserves stood at US$37.05 billion, compared with US$34.70 billion as at the end of June 2024. This represents eleven months of import cover for goods and services, the CBN said at the end of the monetary policy committee meeting.
Data from the Apex Bank website showed that the total balance in the nation’s external reserves climbed to about $36.24 billion on Monday. In the global commodity market, the price of crude oil has fallen to its lowest point in more than a month, even though there have been recent exchanges of attacks between Israel and Houthi militants in Yemen.
Brent prices dropped by 2.01% to $80.04, while WTI prices decreased by 2.35% to $76.58. In addition, the price of gold rose by 0.54% to $2,407.50 per ounce. #Naira Plunges, Foreign Reserves Hit $36.24 Billion CBN Hikes Interest Rate by 50bps to 26.75%
