Naira Slides as Demand Pressures Resurface in FX Market
The naira slid against the US dollar as the currency market faced mild demand pressure. Demand for foreign currency grew at a higher speed than the amount available to settle transactions. Spot data revealed that the Naira depreciated by 0.30%, closing at N1,538.55 per US dollar in the official market.
The exchange rate fluctuation had eased following aggressive FX sales to banks. Rates have diverged strongly between the official and parallel market. The local currency retreated due to year end demand in the official market.
According to channel check, the naira exchange rate ended the day at ₦1,670 per US dollar in the parallel market, This extended the gap between the official and parallel market rates to about N132 on each US dollar.
The huge exchange rates gap or FX spread has further created a huge opportunity for speculative currency activities in the market. Data from the Apex Bank showed that gross balance in the nation’s external reserves climbed near about $40.9 billion.
Due to rising optimism, soem analysts projected that foreign reserves could climb to $41 billion following $2 billion FX swap deal between Nigerian and China as part of an efforts to cement bilateral trade relationship.
Oil prices rose on Monday amidst global demand and supply uncertainties, with Brent Crude increasing by 0.97% to $73.97 per barrel and West Texas Intermediate (WTI) increasing 1.09% to $70.38 per barrel.
The rally reversed losses from the previous session, supported by a somewhat optimistic market outlook in the short term. Meanwhile, gold prices stabilized in light trading as investors anticipated the U.S. Federal Reserve’s interest rate plans and President-elect Donald Trump’s tariff policies, which could influence the metal’s direction next year. #Naira Slides as Demand Pressures Resurface in FX Market Interbank Rates Slow as Remita, FAAC Credits Boost Liquidity
