Nigerian Naira Depreciates as Interbank FX Turnover Slumps 78%
The naira depreciated to N1,332 per US dollar in the Nigerian foreign exchange market (NFEM) on Monday amidst optimism about the nation’s growing external reserves.
The forex market dynamics were relatively stable, as foreign portfolio investors actively drove the supply side, supported by non-bank corporates, exporters/importers, and other related sources.
Elevated oil prices and global inflation concerns raised the odds of a Federal Reserve interest rate hike, but the hawkish outlook has been dashed by the latest report showing a sharp decline in US jobs.
According to data released by the Central Bank of Nigeria (CBN) on Monday, the spot FX rate depreciated to N1332.0960 per US dollar at the official window, from N1331.1860 at the previous close on Friday.
FX traders at the Broadstreet said transactions were consummated between N1330.5000 and N1332.9900 to the US dollar during the intraday trading session. Activities of financial institutions at the official FX window eased, with a sharp decline in interbank FX turnover at the beginning of the week.
The authority’s daily FX update revealed that interbank FX turnover was lower at $36.242 million on Monday, down about 78% from $162.736 million reported at Friday’s close.
Nigeria’s foreign reserves climbed to $50.076 billion on sustained hard-currency inflows from global sources, including remittances. Despite significant oil swap deals, the CBN revealed that net foreign reserves surged to $46 billion amidst rising private capital inflows.
Uncertainties in the global commodity market since February have continued to boost Nigeria’s fiscal performance, supported by rising crude oil production.
Oil prices rose today as attacks on Saudi Arabia outweighed expectations of increased supply following fresh Russian diesel exports and a Russia-Ukraine energy ceasefire announced by US President Donald Trump. Nigerian Naira Softens Against US Dollar, Euro, British Pound
