Naira Slides to N841, Parallel Market Rate Rebounds
The Nigerian Naira had a mixed performance against the US dollar. The Naira depreciated by 2.70% in the official market, closing at N841.14 to the US dollar compared to the previous rate of N818.99.
Yesterday, Reuters reported that the exchange rate fell to N1,105 during an intraday trading session, citing data from the London Stock Exchange Group.
Foreign inflows into the country have come under pressure despite efforts to reflate the economic performance of Africa’s largest economy by size of gross domestic products.
The US dollar shortage and rising demand for forex kept the Naira under intense pressure, forcing downward repricing of the local currency. Even after official depreciation, the naira has continued to decline across the forex market despite higher oil prices above 2023 budget benchmark.
Recently, there was an improvement in Nigeria’s gross external reserves as a result of improved crude oil production as per OPEC data. That trend has however reversed as foreign reserves slide below $33.4 billion – providing an imports cover for seven months, according to Broadstreet analysts.
In the global commodity market, oil prices were trading below $80 per barrel, with Brent crude at $79.93 per barrel and West Texas Intermediate (WTI) crude oil at around $75.38 per barrel.
The latest data from the US Energy Information Agency (EIA) indicated a 7.6% decline in fuel product supplied halfway through November, aligning with the earlier report that the oil market might not be as tight as initially thought.
The agency is bullish on global oil demand just as OPEC maintained a positive stance about the outlook. In the parallel market, however, the Naira’s performance remained positive, closing at N1,069 per dollar, compared to N1,135 previously as demand pressures eased. Naira Devaluation Deepens Economic Crisis in Nigeria