The Nigerian naira rose by 80 basis points against the US dollar in the foreign exchange (FX) market on Monday, owing to strong demand pressures.
The market expects the monetary authorities to hold an FX auction in September to reverse the negative trend against the naira in the official currency market.
The FX problem has persisted, prompting the monetary authority to sell OMO bills at a rapid pace ahead of retail Dutch auction sales in September.
To increase FX supply in the market, the apex bank has been selling OMO bills in the primary market at a rapid pace, indicating a weak net external reserves balance.
Bizwatch Nigeria reported that the Central Bank of Nigeria (CBN) reintroduced the Retail Dutch Auction System in August as part of its attempts to channel foreign currency to FX consumers.
The Naira appreciated by 0.80% versus the US dollar on the official market, closing at ₦1,585.77 per US dollar.
The exchange rate is predicted to decline further due to the anticipation that NNPCL’s external reserves will be affected even more as a result of its $6 billion debt to fuel suppliers.
The Naira saw further demand pressure as it depreciated by 0.31% to ₦1,625 per US dollar in the parallel market. Data from the Central Bank showed that external reserves declined further $36.321 billion following successive outflow in August, 2024.
Crude oil prices extended losses In the global commodity market due to higher OPEC+ production in October and a sharp drop in output from Libya, along with sluggish demand in China and the U.S.
However, the market rebounded towards the close of trading. Brent prices increased by 0.62% to $76.71, while WTI prices gained 0.94% to reach $74.24. Gold prices also increased by 0.22% to $2,533.10 per ounce.
