During the midweek currency market trading session, the Nigerian naira temporarily lost its battle against the US dollar, which was dominating the official market. The recent decrease in FX demand pressures on the black market for currencies has helped the local currency score some goals.
The naira depreciated to a level it had broken due to strong demand in the Nigerian autonomous foreign exchange market (NAFEM). The increased exchange rate is still a sore spot on businesses’ books. FX users who are unable to reduce imports are nevertheless suffering from the weight of FX losses that are negatively affecting their profits performance.
Although the apex bank declared sales of $10,000 to 1,538 bureau de change operators (BDCs) at N1021—a sum for which it denied defending the naira. Analysts argued that irrespective how the Central Bank of Nigeria (CBN) sees it, the local currency is enjoying its FX sales intervention in the parallel market.
This week, gross external reserves of the CBN climbed to $32.211 billion, providing more than six months import cover based on trade records. Nigeria’s foreign reserves had dropped to $32.106 billion last week before climbing again this week.
The moderate increase was attributed to remittances amidst tight price performance in the oil market.
Oil prices experienced a mixed outcome in the global commodity market. Brent crude increased by 0.07% to close at $88.52 per barrel, while WTI crude saw a decline, dropping by 0.16% to $83.33 per barrel.
According to information from FMDQ Securities Exchange, the Naira experienced a 0.64% depreciation against the US dollar, concluding at ₦1,308.52 at the official rate on Wednesday. In the parallel market, the US dollar was to invisible FX users at ₦1,305.
Now, exchange rates gap between official and informal market rates settle at N3.
