Based on information from the FMDQ dashboard, the exchange rate moved in favor of the Nigerian naira at the official rate on Monday, rising by around 10%. Due to enough US dollar liquidity in the system, the parallel market also witnessed a modest recovery.
Important market players concluded foreign exchange deals at far better rates than they had in the week leading up to Christmas. According to some market commentators, the local currency would become more valuable than the anticipated flood of foreign cash from the diaspora by year’s end.
Nigerians living off the coast have begun sending money home for their loved ones, according to experts who communicated with MarketForces Africa at the time this story was filed.
“This is not peak period for imports”, LSintelligence Associates said in a note review by MarketForces Africa, saying that year-end forex demand could be insignificant enough to drive naira wild.
Despite increased optimism about oil export receipts, the external reserves continue to decline. However, market analysts are hoping that the decision to up Nigeria’s oil production output would be positive for the government. In the global commodity market, oil prices experienced a negative trend on Monday, with Brent Crude trading at $78 per barrel and WTI at $73.19 per barrel.
Data from the Central Bank of Nigeria (CBN) shows that the gross external reserve remained tightened around $33 billion band.
In the foreign exchange market, the Naira showed a strengthening against the US dollar, appreciating by 9.64% in the official market to close at N837.77, according to data from the FMDQ FX OTC dashboard.
In the parallel market, the Naira also appreciated by 0.34% day-on-day to close at N1,159 per dollar – possibly, the space would experience a supply glut as diaspora remittance flows.
