The foreign exchange spread, or the disparity between official and parallel market exchange rates, narrowed to N21.34 as the naira experienced further depreciation within the Nigerian autonomous foreign exchange market.
Spot FX data from the FMDQ trading platform revealed that the naira depreciated by 0.34 percent within the official window, closing at ₦1,538.66 per dollar. However, the exchange rate remained stable at N1560 per US dollar within the parallel market.
Within the official market, exchange rates fluctuated between N1,535.00 and N1,540.00 prior to closing at N1,538.66. The Central Bank has been facilitating the sale of US dollars to banks as a measure to maintain robust market supply.
Despite these efforts, the exchange rate has been experiencing a gradual decline. Analysts anticipate that the CBN will intervene within the forex market to provide support to the naira. Otherwise, the naira could experience a rapid depreciation.
FX market analysts and investment banking experts predict that the naira will continue to trade within the fluctuating range as long as the interest rate environment remains appealing to foreign portfolio investors.
Short-term capital has continued to circulate within the Nigerian financial market, with a focus on OMO bills. The CBN appears to have subtly reduced OMO issuance, with only one offering in February and March.
Following the recent influx of capital, the nation’s foreign reserves increased to $38.322 billion on Wednesday, up from $38.303 billion at the commencement of the week, amidst fluctuations in oil prices.
Within the global commodity market, oil prices experienced a slight increase on Thursday, approaching a one-month high due to global supply concerns, although gains were tempered by concerns regarding the economic impact of new U.S. tariffs.
Brent crude futures increased by 9 cents, or 0.1 percent, to $73.88 per barrel, while WTI crude gained 20 cents, or 0.3 percent, to $69.85. Meanwhile, gold surged to a record high as investors sought safe-haven assets amidst escalating trade tensions and declining equity markets. Spot gold increased by 1.2 percent to $3,057.12 an ounce, after reaching an all-time high of $3,059.30.
