Naira Softens, FX Transactions Moderated at Interbank Window
The naira softened against the US dollar slightly amidst a sharp decline in FX activities at the interbank foreign exchange market on Wednesday.
According to data released by the Central Bank of Nigeria (CBN) the local unit experienced mild selling pressure, depreciating by 0.05% to settle at N1,329.86 to the US dollar at the official window.
FX transactions were exercised between N1328 and N1331.5000 per US dollar during the day at the Nigerian foreign exchange market (NFEM), a mild pressure when compared with activity flow reported the previous day.
The market recorded a sharp decline in interbank FX transactions, with a significant decline in US dollar volume and deals count among market makers.
Data showed that interbank FX turnover fell by approximately 66% on the day to $89.355 million from $262.10 million recorded in the corresponding period on Tuesday.
Broadstreet analysts maintained a bullish outlook for the local currency as gross external reserves continue to climb.
Latest data show Nigeria’s foreign reserves topped $54.6 billion on sustained FX inflows from across sources. The country’s gross external reserves outlook remains positive as global crude oil prices surge above $107 per barrel on Wednesday.
Oil prices edged lower Wednesday ahead of the Federal Reserve’s interest-rate decision, while continuing disruptions in the Middle East and Houthi advances kept supply risks elevated.
Brent crude futures fell 1.3% to $107.34 a barrel, while West Texas Intermediate declined 2.3% to $103.42 a barrel. Both benchmarks remained near four-month highs after settling Tuesday at their highest levels since May 19. CBN Allots N4.4trn in OMO Bills to Investors, Rates Below 20%
