Exchange rates fell across the currency market due to a record US dollar deficit in both the official and unofficial markets. With experts predicting more volatility, the naira fell by 15 basis points despite an increase in the nation’s gross foreign reserves.
According to FX spot data from the FMDQ website, the Naira fell by 0.15% and closed at ₦1,603.16 per US dollar in the official market. The local currency’s value fell as demand for US dollars soared in the Nigerian autonomous foreign exchange market on Monday.
Last week, the Central Bank of Nigeria (CBN) defended the naira on the official market by selling $60 million to authorized dealer banks. The naira is decreasing while the government is increasing the country’s external reserves with lower US dollar volume sales to boost liquidity in the official FX market.
According to the most recent statistics, Nigeria’s foreign reserve balance has increased to almost $39 billion, the highest level since 2022 during the oil boom. According to CBN data, Nigeria’s external reserves presently stand at $38.992 billion in gross balance.
In the parallel market, the Naira finished at N1,705 per dollar, owing to a persistent surge in demand for invisible payments.
At current exchange rates in both the informal and official markets, the FX spread has increased to N102, offering an incentive for speculative currency trade.
Oil prices rose by more than 1% on the global commodities market after China announced a cut in its benchmark lending rate. Brent crude rose to $74.15 and WTI to $70.62.
In the precious metals market, gold surged to a record high, while silver approached a near 12-year peak. These gains were fueled by growing uncertainties surrounding the upcoming U.S. presidential election and the ongoing conflict in the Middle East.
Additionally, expectations of easing interest rates further contributed to gold’s rally, which traded at around $2,738.00 per ounce.
