Following FX sales to authorized dealers last week, the naira underperformed and continued to weaken against the US dollar in the official currency market on Monday. After the central bank resumed selling foreign exchange intervention products during the official window last week, a few analysts predicted that the currency rate would begin to rebalance.
To halt the decline in exchange rates, the Central Bank of Nigeria (CBN) sold a total of 122,671 million dollars to 46 authorized dealers. The official window saw a 0.86% depreciation of the naira against the US dollar, or ₦1,577.29, according to statistics from the FMDQ website.
The increased FX demand for payments was the cause of the extra value loss. This implies that the market’s FX liquidity fell short of demand, which led to the spot rate depreciating from its previous close of N1563.80 on Friday.
In the parallel market, the naira exchange rate depreciated to ₦1,545 per US dollar from N1540 last week due to rising demand in the informal local currency market.
Nigeria’s external reserves surged to $35.375 billion on July 12, according to data from the CBN website. The sustained rise in external balance was the result of FX inflows and crude oil revenue from the NNPCL.
Elsewhere, crude oil prices increased today as US inflation eased, bolstering hopes that the Federal Reserve will cut interest rates later this year. As a result, Brent prices decreased by 0.19% to $84.87, while WTI prices increased by 0.35% to $81.94.
Additionally, gold prices rose by 0.51% to $2,432.80 per ounce at the time of this report.
