In the foreign exchange markets, the value of the Nigerian naira declined as exchange rates worsened more than analysts had predicted. The official market saw the naira finish at ₦1,520.40 per US dollar, down 2.86% versus the dollar, according to currency movement data from FMDQ.
The Nigerian independent foreign exchange market did not have enough US dollars to meet the demand of eligible market participants for foreign currency to meet their import payment commitments.
Because fixed income assets are returning less than inflation and global central bankers are maintaining high interest rates, which is draining FX inflows, foreign portfolio investors are continuing to remove money from the market.
The foreign exchange injection by the central bank into local deposit money banks and the unofficial market has sharply decreased causing the naira to lose significant value after it toppled other currencies to become the world’s best performer in April.
In the parallel market, the naira closed at ₦1,515 against the US dollar as the Central Bank of Nigeria (CBN) slowed down foreign currency or forex selling to bureaux de change operators (BDCs) in the informal currency trading market.
The members of the monetary policy committee have received notice from the apex bank that their meeting will take place in Abuja on May 20 and 21, 2024. The authority held its first meeting under Yemi Cardoso in February and another meeting was scheduled for March.
According to official data obtained from the CBN webiste, the country’s external reserves increased even more, rising to $32.538 billion, despite fluctuations in the price of crude oil globally and a record low volume of production.
Oil prices declined as Brent crude dipped by 0.78% to $82.71 per barrel, while West Texas Intermediate (WTI) crude also fell by 0.83% to $78.47 per barrel on Tuesday.
