In the official foreign exchange market, the naira, the unstable native currency of Nigeria, had a lackluster daily rise. The idea that the naira will appreciate is unfounded. Despite a sell order granted to deposit money institutions to lower their net open position, the supply side has continued to be tight.
The naira strengthened by 0.34% vs the US dollar during the Nigerian independent FX Window, according to data from FMDQ, and ended at a rate of ₦1,498.25. This suggests that the problems with FX liquidity could be more serious than first appears.
Analysts saw a sharp decrease in the value of the naira compared to its struggles to regain lost ground on foreign exchange markets. There was additional pressure on the unofficial market due to the restricted supply side.
In the parallel market, the Naira closed at N1,600 against the US dollar as invisible demand passed through the space. This has widened the gap between official and parallel market spot rates to 7% after it has strongly reduced following intermittent FX market intervention by the Central Bank.
In the global commodity market, West Texas Intermediate (WTI) crude futures advanced by 1.05% to $77.45 per barrel on Thursday. Also, the Brent Crude increased by 0.92% to close at $82.35 per barrel.
Despite improved production volume as per the OPEC report, accretion unto Nigeria’s foreign reserve has been unimpressive, and limited. Data from the CBN website showed that gross external reserves printed at $33.2 billion.
