Naira Rises Against US Dollar as Interbank FX Trades Ease
The naira appreciated against the US dollar in the currency market on Wednesday, amid a lack of significant FX pressure from corporate demand.
The local unit saw a moderate gain against crosses as FX activity eased, with an improved US dollar volume on the supply side. The official data indicated that the spot FX rate settled at N1,382.1841 per US dollar, down from N1,383.0755 the previous day.
Transactions at the Nigerian foreign exchange market were consummated between N1379.5000 and N1384.5000, the rates which signal an improvement in FX liquidity from the previous level.
According to the Central Bank of Nigeria, interbank FX turnover moderated as trading activities among financial institutions and market makers declined sharply.
Daily FX data released showed that NFEM interbank FX turnover closed the day at $121.727 million, about 50% below the previous record of $243.095 million set on Tuesday.
Official trading records released by the Central Bank revealed that interbank FX deals among market makers went down from the previous day to 115 from 140.
The improved FX liquidity dynamics in the official window bolstered the value of the naira, which strengthened to N1382.1841 per greenback.
The parallel market was mixed, with the naira strengthening slightly against the US dollar on improved FX supply, while the pound and euro appreciated due to stronger demand for foreign currencies.
The naira is expected to remain stable against the US dollar, supported by improved FX liquidity, although demand pressures could keep the pound and euro elevated in the near term.
In the global commodity market, oil prices were little changed Wednesday as U.S. forces carried out another round of strikes against Tehran and Washington reinstated its naval blockade of Iranian ports near the Strait of Hormuz.
U.S. West Texas Intermediate futures for August delivery added 26 cents to close at $79.60 per barrel. September futures for international benchmark Brent advanced 22 cents to settle at $84.95.
U.S. Central Command said late Tuesday stateside that it had carried out another wave of strikes against Iran, targeting dozens of military assets near the Strait of Hormuz and along Iran’s coastline in a seven-hour operation.
The attacks, involving fighter aircraft, drones and naval vessels, struck missile and drone facilities, naval assets and coastal defense systems to further degrade Iran’s ability to threaten commercial shipping, Centcom said.
The operation started as U.S. forces resumed a naval blockade on vessels travelling to and from Iranian ports earlier in the day. #Naira Rises Against US Dollar as Interbank FX Trades Ease#
