Naira Plunges over Forex Supply Shortage
The Nigerian naira depreciated against the United States (US) dollar on Monday at the Investors’ and Exporters’ foreign exchange (FX) window as the foreign currency shortage persists.
The Naira lost by 4.27 per cent when compared with N743.07 for which it exchanged for the US dollar after the close of business on Aug. 4. Traders said the open indicative rate closed at N771.64 to the dollar on Monday.
FX illiquidity in the market has continued to impact the supply side in a country that depends largely on imported goods and services. Data from the FMDQ Exchange showed that the local currency spot foreign exchange rate settled at N774.78 at the Investors and Exporters window.
The exchange rate opened the week N743.07 after the previous rally following an underwhelming FX supply in June. Data from FMDQ showed there was a 66% decline in forex inflows into investors’ and exporters’ forex windows in July.
In the parallel market, the Naira experienced a depreciation of 0.79% against the US dollar, reaching N888 as bears returned to the global crude oil market.
Brent crude fell 1.03% to $85.35 per barrel, while WTI crude lost 1.12% to $81.90 per barrel. Oil futures were lower, driven by profit-taking activities across the market, as investors re-evaluated the potential impacts of extended supply cuts implemented by Saudi Arabia and Russia.
In the market, a spot exchange rate of N799 to the dollar was the highest rate recorded within the day’s trading before it settled at N774.78. The Naira sold for as low as N475 to the dollar within the day’s trading.
A total of 45.98 million dollars was traded at the investors and exporters window on Monday. Overall, Naira depreciated by 4.27% against the US Dollar as forex scarcity persists. #Naira Plunges over Forex Supply Shortage Naira Devaluation Deepens Economic Crisis in Nigeria
