The naira depreciated against the US dollar in the official market as foreign exchange (FX) turnover in the Nigerian Autonomous Foreign Exchange Market (NAFEM) fell by 14%.
Data from the FMDQ platform revealed that the naira weakened by N20 (1.31%), closing at N1,545 per US dollar due to renewed demand pressures. FX transactions on the NAFEM window ranged between N1,515 and N1,557 per dollar, according to a report by AIICO Capital Limited.
Coronation Research noted that NAFEM turnover declined by 14.13% (US$345.20 million), amounting to US$2.10 billion last week. The inflow at the NAFEM window totaled US$1.22 billion, with contributions from various sources: the Central Bank of Nigeria (CBN) (8.07%), foreign portfolio investors (41.34%), non-bank corporates (26.29%), exporters (21.22%), and other unidentified sources (3.1%).
Despite tight forex liquidity and surging demand, the naira appreciated marginally on the electronic trading platform, gaining 4 basis points to close at N1,548.46 per US dollar in the Electronic Foreign Exchange Matching System.
Global Commodity Market Update
In the global commodity market, oil prices climbed by 1%, driven by expectations of increased demand from China following the announcement of economic stimulus plans. Brent crude traded at approximately $72.99 per barrel, while WTI stood at around $69.40.
Gold prices also rose after inflation data aligned with expectations, boosting the likelihood of a Federal Reserve rate cut. Gold was priced at about $2,714.83 per ounce.
Analysts predict that geopolitical and macroeconomic developments will continue to shape market sentiment, with investors closely monitoring the upcoming U.S. Producer Price Index (PPI) data for insights into monetary policy.
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