The naira exchange rate increased somewhat in the forex market as rumours circulated that the Central Bank of Nigeria (CBN) may not begin retail Dutch auctions.
According to spot data from the FMDQ platform, the naira increased by 0.16% and closed at ₦1,622.57 per US dollar in the official market. In the parallel market, the naira finished at ₦1,675 per US dollar.
Demand for foreign currency continues to outstrip FX availability, making exchange rate movement tight across the markets. The difference between official and parallel market pricing has recently surpassed N120 until the Central Bank of Nigeria intervened.
The Apex Bank may have known that there is more to its desired willing buyer, willing seller guideline in a country that depends heavily on imports. With about 90% dependence on hydrocarbons to generate FX receipts, analysts believe Nigeria must do more to increase exportation of value products that meet international standards.
“Country with strong FX receipt and home growth would have a strong local currency,” LSintelligence Associates said in a chat.
In the global commodities market, oil prices rose over 3% due to increased U.S. fuel consumption, Middle East supply concerns, and potential growth in energy demand from the U.S. and China.
Brent prices surged to $79.62, and US benchmark WTI prices to $76.14. In addition, gold prices rose after traders bet on a potential Federal Reserve interest rate cut, reaching $2,642.70 per ounce.
