According to statistics from the FMDQ website, the Nigerian naira has continued to recoup lost value in the currency market, landing at around N875 per US dollar.
The spot FX rate at the Nigerian Autonomous Foreign Exchange Market (NAFEM) had declined to N1089 at the start of the week due to a substantial imbalance between FX demand and supply.
FX supply in the market has continued to decline below pre-pandemic levels, and the Central Bank of Nigeria has just ceased market intervention. Despite this, the naira’s survival record has remained strong, despite the fact that demand frequently drives the rate down.
According to dealers, the Naira performed poorly in the currency market. The Nigerian naira gained value against the US dollar, closing at N874.79 per dollar in the official market.
However, in the parallel market, the local currency experienced a 1.45% depreciation day-on-day, closing at N1,257 per dollar. FX spot rate movement at the black market continues to hover below N1300, far below official rate volatility.
In 2024, some analysts believe that FX illiquidity is likely to persist in the short term as foreign capital into the country remains constricted. The government has however indicated a plan to borrow foreign currency to support its spending plan. In all, analysts are projecting no to good rate for the year.
In the global commodity market, WTI crude futures rebounded by over 2%, reaching $72.89 per barrel, while Brent Crude traded at $78.05 per barrel. Naira Lost 11% as Banks Issue New Update on FX Spending
The resurgence has been driven by concerns over shipping security following an armed group’s attack on an oil tanker in Oman, escalating fears of a potential Middle East conflict amid the Iran-US sanctions disputes.
