Naira Sinks as US Dollar Volume in FX Market Dips by 40%
The naira depreciated to N1,675.62 per US dollar at the Nigerian autonomous foreign exchange market on Monday. The local currency plunged further as data showed that US dollar volume at the autonomous FX market declined by more than 40% at the end of last week.
Spot data from the FMDQ Exchange platform revealed that the naira lost N23 due to the US dollar liquidity shortage in the official window. This translates to a 1.39 percent loss in the value of the local currency when compared to the previous exchange rate of N1,652.62 to a dollar on Friday.
On Monday, the total daily turnover reduced to 108.79 million dollars, down from 243.05 million dollars recorded on Friday. At the Investor’s and Exporter’s (I&E) window, the naira traded between N1,710 and N1,650 against the dollar.
Traders at AIICO Capital Limited reported that the exchange rate fluctuated between N1,660.44 and N1,703 before finally closing at N1,675.62. The naira has been under pressure despite the improvement in market liquidity, as the overall supply remained insufficient to keep the naira stable.
Last week, the spot rate at the Nigerian autonomous FX market traded within a range of N1,620 and N1,707.5 but closed at N1,652.25 in the spot market. According to data from FMDQ, US dollar turnover declined by -40.6%, or US$963.9 million, to close at US$963.97 million.
The official window recorded an inflow of US$755.9 million for the week. The CBN accounted for 22.3% of the total inflow, foreign portfolio investors (FPIs) contributed 28.1%, non-bank corporates 17.0%, exporters 30.5%, and others accounted for 2.2%.
Elsewhere, oil prices dropped roughly 2% after Axios reported an agreement between Israel and Lebanon to resolve the Israel-Hezbollah conflict, according to a senior U.S. official.
Brent crude fell to $73.91 per barrel, while WTI was around $69.93. Additionally, gold prices plummeted nearly 3%, ending a five-session rally as the potential ceasefire and Trump’s Treasury Secretary nomination diminished its safe-haven allure, with gold at approximately $2,634.78 per ounce. #Naira Sinks as US Dollar Volume in FX Market Dips by 40% Money Market Rates Mixed as Banking System Deficit Reduces
