Naira Skids at Official Market, Nigeria Sees Fresh FX Inflow
The naira has lost weight twice this week as foreign currency demands continue to surpass market supply at the Nigerian Autonomous Foreign Exchange market (NAFEM).
According to data from FMDQ, the Naira depreciated by 7.53%, closing at N869.91 to the US dollar in the official market, compared to the previous rate of N809.02. This is a reversal from the exchange rate trend spotted last week.
Positive sentiment from expected FX inflows of $10 billion and the decision of the monetary authority to clear the FX backlog had helped set the local currency on a recovery path. At the official window, the exchange rate was near N1,000 while the open market rate ran amok.
Staying on the recovery line in the parallel market, the Naira’s performance continued to strengthen as the local currency closed at N1,030 per dollar on Tuesday, compared to N1,035 previously.
Demand pressure at the parallel market continues to ease even while positive sentiment about the Central Bank of Nigeria (CBN) FX backlog payment eased. This suggests that the demand pressure for the US dollar has been easing in the parallel market.
Amidst a bearish stance in the global oil market, Nigeria recorded an addition to external reserves. Data from the Central Bank of Nigeria website showed the gross external reserves inched higher by $41 million.
This pushed gross external reserves to $33.437 billion, providing imports cover for seven months, according to analysts. Today, Brent crude dropped by 2.56% to $82.99 per barrel, while the West Texas Intermediate (WTI) crude oil also declined by 2.49% to $78.80 per barrel.
Both benchmarks gained about 30 cents on Monday after top exporters Saudi Arabia and Russia reaffirmed their commitment to extra voluntary oil supply cuts until the end of the year.
While China’s crude oil imports showed robust growth both year on year and month on month in October, the country’s total exports still contracted at a quicker pace than expected. Naira Steadies as Banks Issue Update on FX Purchase
Nigeria’s oil export revenue has improved with increased production volume, though moderation in global market prices poses a risk to further upside. # Naira Skids at Official Market, Nigeria Sees Fresh FX Inflow
