Naira Slides Over Lean Official FX Supply
The Naira depreciated by 0.04% at the official market, closing at N902.45 per US dollar on Friday from N902.08 in the previous day. Naira continued its nosedive as FX demand could not be met at the official window.
The exchange rate is expected to decline further after a devaluation of the naira in June failed to achieve a market clearing rate. For more than 3-months, the apex bank has halted forex market intervention, allowing forces of demand and supply to fix the exchange rate at Nigeria’s Autonomous Foreign Exchange market.
Investment banking firm CardinalStone Partners Limited expects the official exchange rate to hit N1000 in 2024, details from its FX outlook for the year showed. Naira bear Agusto Ratings have a rather not-too-good prediction for the local currency. In a note, Agusto predicted that the official exchange rate would hit N1100 per US dollar in Nigeria’s Autonomous Foreign Exchange market.
In the parallel market, the Naira closed at N1,353 against the US dollar amidst rising demand for foreign currency for import payments.
The global crude oil market is still faced with uncertainties. Though Nigeria’s oil production has continued to increase, prices of crude oil have remained unstable amidst geopolitical unrest. The West Texas Intermediate (WTI) crude futures advanced by 0.69% to $74.46 per barrel on Friday.
Also, the Brent Crude increased by 0.72% to close at $79.67 per barrel. Analysts expect an increase in oil sales to boost external reserves in 2024 as the government intensifies efforts with more investment in the segment.
Despite a series of oil swap arrangements, Nigeria’s FX reserve maintained its accretion trend this week, increasing by USD82.42 million to close at USD33.20 billion, according to data from the Central Bank
Cordros Capital Limited said in an update that total turnover in the market decreased by 36.4% to USD 419.92 million on Thursday, as trades were consummated within the N701.00 – N1,299.50. Nigeria Eurobond Slumps after CBN Resumes OMO Auction
The naira appreciated across forward contracts last week. The exchange rate for 1 month gained 2.7% to N958.29, 3 months appreciated by 3.1% to N974.87, 6 months jumped by 3.9% to N1,000.61 and 1-year forward contract rose by 4.7% to N1,064.51. #Naira Slides as Over Lean Official FX Supply
