Naira Trades at N810, Parallel Market Rate Slides
The naira appreciated by about 6% at the Nigerian Autonomous Foreign Exchange Market (NAFEM) as demand for foreign currencies spiked above supply level. The local forex market has been heat up with increasing demand for import payments. There is another side to it, research analysts at LSintelligence Associates said.
“Exchange rate is affected by spurious demand emanating from speculative activities”, the firm added in a note shared with MarketForces Africa. There have been notion that government may take drastic measure by neutralising the parallel market impacts on the exchange rate.
There is a plan to eliminate middlemen activities in the forex market, sources told MarketForces Africa. Exchange rate at the open market has continued to worsen even after the Central Bank of Nigeria (CBN) announced decision to lift restriction of 43 items banned in 2015.
Data from FMDQ review showed that the Naira edged the greenback by 5.51% at the organised FX market, closing at N801.10 to the dollar from N847.77 per dollar the previous day.
Cowry Asset managers resurgence to ease in demand pressure and FAAC inflow into that hit the system. On the contrary, in the parallel market, the Naira took further beating on Wednesday.
Open market exchange rates dropped by 2.77% as demand pressure continues to bite harder on the back of little or no dollar supply, closing at a new low of N1,300 against the US dollar.
The commodities market continues to face bearish situation. This keep Nigerian External Reserves tight despite improved production volume toward meeting the Organisation of Petroleum Exporting Countries quota of 1.78 million barrel per day.
Global benchmark Brent crude traded at $ 87.97 per barrel, down by 0.11% from the closing price of $88.07 a barrel in the previous trading session.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $ 83.50 per barrel, down 0.28% from Tuesday’s close of $83.74 per barrel.
MarketForces Africa reported that crude oil prices dropped on Tuesday, giving up nearly half of the gains made since the Hamas attack on Israel as the short-term risk premium somewhat diminished. IPPIS: FG to Delist Unverified Workers on Oct. 27
Brent prices settled at around US$88 as the risk premium diminished yesterday as the demand outlook remains unimpressive. #Naira Trades at N810, Parallel Market Rate Slides