The Nigerian naira experienced mixed fortunes in the foreign exchange market this week, with the official rate appreciating while the electronic trading platform saw a slight depreciation. This comes amid continued uncertainty surrounding the currency’s true value and a 15% decline in US dollar inflows.
At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira strengthened by 0.38% to N1,544.05 per US dollar on Tuesday, driven by easing demand pressure and sufficient foreign exchange liquidity. While exporters contributed to inflows last week, the overall volume of US dollars entering the official market decreased.
NAFEM recorded $1.04 billion in inflows, a 15% drop from the previous week’s $1.22 billion, according to Coronation Merchant Bank Research. Foreign portfolio investors remained a significant source of inflows, contributing 39.66%, while non-bank corporates contributed 37.08%.
However, the naira weakened by 0.7% to N1,553.19 per dollar on the Electronic Foreign Exchange Matching System (EFEMS), reflecting concerns about the currency’s stability.
Global Market Influences
Global oil prices declined as China’s economic data raised concerns about demand. Brent crude fell to approximately $73.12 per barrel, and WTI to around $70.27 per barrel. Gold prices also faced downward pressure from a strengthening US dollar and rising Treasury yields, trading near $2,636.89 per ounce.
