The apex bank reduced US dollar sales to currency dealers on Thursday, which caused the Nigerian naira to halt its upward trend in the official window. By selling foreign currency to banks and Bureau de Change operators, the apex bank sets the direction of exchange rates.
The most recent local currency surge, according to analysts, was mostly caused by the central bank’s limitation of speculative activity and continuous infusion of foreign money into the market. Nonetheless, the monetary authority is offering currency at a lower price to brokers for subsequent sales in an effort to impact the entire FX market.
The Central Bank of Nigeria (CBN) used interest rate modifications to combat the rising headline inflation while, for the first time in a long time, giving the direction of the currency rate more consideration.
According to information from the FMDQ securities exchange, the Naira depreciated by 0.69%, closing at ₦1,309.39 per US dollar at the official market. Trades were consummated within the N1,200– N1,486 band, according to Cordros Capital.
The naira closed the day at ₦1,300 to the US dollar on the parallel market, according to MarketForces Africa’s channel checks. This occurred after regulated currency dealers in the alternative market purchased $10,000 in US dollars for N1251.
This week, the apex bank sold another round of $10,000 to each of the eligible Bureau de Change operators at N1,251 with an allowable spread capped at 1.5% in an effort to control exchange rate direction.
This has assisted in stabilising the value of the naira over the last week as CBN Governor Yemi Cardoso’s regulatory measures become more stringent. Fx liqudity eased moderately across market due to sustain US dollar injections.
Nigeria’s FX reserves weakened further this week, as the gross reserves level fell by about $312 million to $33.95 billion. In the global commodity market, oil prices took a positive turn amidst geopolitical pressures.
West Texas Intermediate crude saw a 1.58% increase to $82.64 per barrel, while Brent crude saw a 1.42% increase to $86.62 per barrel.
