Naira’s Markets Wide Rally Drags Exchange Rates Gap Down
The naira climbed against the US dollar across the foreign exchange (FX) markets and the positive movement caused gap between official and parallel market rates to shrink significantly.
According to FX spot data from the FMDQ platform, the naira appreciated by 0.59%, closing at ₦1,659.26 per US dollar at the official market. Yesterday, the local currency depreciated significantly in the official window, lost 8.5% to close at N1,669.15 per US dollar.
US dollar shortage remain downside to exchange rate recovery even when the nation’s external reserves is theoretically considered to be strong enough to weather the storm.
But analysts said a significant amount from the total balance of $38 billion in the foreign reserves have been pledged, meaning the true balance is far lesser.
In the black market, exchange rate recovered, the same pattern observed in the official foreign currency market on Thursday. The market wide appreciation of the naira reduced FX gap significantly.
Channel check showed that the Naira closed at ₦1,665 to the US dollar in the parallel market today, from N1684 per greenback on Wednesday.
With official rate at N1659 and parallel market rate of N1665, FX gap has collapsed to N6 on each US dollar, thus reducing speculative activities in the currency markets.
This was in contrast to the official rate of N1665 versus N1684 per US dollar exchange rate in the parallel market on Wednesday; which left FX spread at N19 on each greenback.
Today, oil prices went up and are set for a third consecutive session of increases due to concerns that Israel might target Iran’s oil industry in response to Tehran’s recent ballistic missile strike.
Brent rose by 4.91% to $77.50, while WTI prices had gone up by 5.18% to $73.73. On the other hand, gold prices dropped due to a stronger dollar as investors lowered their expectations of a significant interest-rate cut from the U.S. Federal Reserve.
The market is now awaiting Friday’s payroll data for more insights into future policies. Currently, gold is trading at $2,680.30 per ounce. #Naira’s Markets Wide Rally Drags Exchange Rates Gap Down NEITI Calls for Transparency to Unlock Nigeria’s Energy Potential
