Naira Reclaims Value as Foreign Reserves Climb to $36.77bn
The Nigerian local currency, the naira, reclaimed small value in the foreign exchange (forex) market on Wednesday as gross external reserves climbed to about $36.77 billion.
Additional inflows of $61 million into the country boosted the nation’s foreign reserves balance to $36.769 billion on July 30, from $36.708 billion the previous day.
Market analysts also attribute the slight gained to efforts of the Central Bank of Nigeria (CBN) to improve FX liquidity in the market. The apex bank resumes FX sales to banks and other authorised dealers with intermittent US dollar supply to bureau de change operators.
Data from the FMDQ platform showed that the official spot rate appreciated by 0.76%, closing at ₦1,608.73 per US dollar at the Nigerian autonomous foreign exchange market over slight improvement in forex liquidity.
Conversely, exchange rate worsened in the informal currency market as US dollar volume demand remained unmet by the amount readily available in the market.
The naira depreciated by 0.63%, averaging ₦1,595 per US dollar as demand for invisible payments increased further in the parallel market during the midweek.
FX inflows from foreign portfolio investors has decline amidst uncertainties in the local economy and heightened political risk from #Endhunger protest.
Total US dollar volume traded in the FX market (turnover) increased by +11.5% or USD 134.8 million, to close at USD1.3 billion on Friday. Meanwhile, the official window recorded an inflow of USD471.9 million.
Breakdown showed that foreign portfolio investors (FPIs) accounted for 9% of the amount, CBN contributed 17% to the supply side while non-bank corporates (29.5%), exporters (35.3%), and others accounted for 9.2%.
In the global commodity market, Brent crude surged by 2.33% to $80.46 per barrel, and West Texas Intermediate (WTI) crude rose by 3.26% to $77.17 per barrel on Wednesday.
The oil market rally was driven by heightened tensions in the Middle East following the assassination of Hamas leader Ismail Haniyeh in Tehran.
Iran’s vow that Israel would ‘pay a heavy price’ intensified fears of potential supply disruptions in the region, further fueling the surge in oil prices. #Naira Reclaims Value as Foreign Reserves Climb to $36.77bn Naira Devaluation Deepens Economic Crisis in Nigeria
