Naira Plunges to N1690/$ as FX Intervention Reduces
The naira depreciated further against the dominant US dollar at the Nigerian autonomous foreign exchange (FX) market, settling near N1690 per greenback on Tuesday.
In the forex market, liquidity level was strained subsequent to lower FX inflows from the Central Bank of Nigeria (CBN). The observed slowed down in FX market intervention has opened up hole for teh naira pricing against the US dollar.
In October, FX auctions sales to banks by the Apex Bank reduced by 30% to $383 million, MarketForces Africa reported.
The spate of US dollar auction sales by the CBN to local banks and operators in the informal currency markets have slowed down significantly. This left foreign currency markets dry, and the naira gasping for fresh breath – with projections showing a dirty end in 2024 for the local currency.
The combined FX sales in the last two months was below total bid received at the retail Dutch System auction conducted in August, 2024. This suggests deliberate efforts to transit fully into willing buyer, and willing seller FX model, which a slew of analysts think could drive exchange rate amok.
Reflecting the level of US dollar demand needed, during retail Dutch FX auction in August, the CBN announced a total bid of $1.1 billion from FX users represented by authorised dealer banks.
But the CBN appears to have ended the Dutch auction system it reintroduced due to huge demand received in the period. On Tuesday, spot data from FMDQ platform showed that the naira depreciated by 0.15%, closing at N1,689.88 for each greenback demand in the currency market on Tuesday.
FX demand has continued to surge across currency markets on the back of Nigerians strong import appetite. The naira closed at ₦1,725 to the US dollar in the parallel market, gaining N5 on each greenback transacted on the day.
On Tuesday, global oil prices experienced an uptick in the commodity market. Brent Crude rose by 0.86%, reaching $72.44 per barrel, while West Texas Intermediate (WTI) saw a 1.01% increase, bringing it to $68.70 per barrel. #Naira Plunges to N1690/$ as FX Intervention Reduces Ghana to Import Petroleum from Dangote Refinery – Official
