Following the Central Bank of Nigeria’s (CBN) firm stance on the willing buyer, willing seller policy decision, the naira became unclean as the currency rate worsened across forex markets under zero FX intervention.
Information from the FDMQ platform indicates that at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the value of the naira decreased by N10.59 kobo, or 0.71%, to N1,500.79 per US dollar.
Following the suspension of the regular FX market intervention, analysts blame the recent negative volatility in exchange rates on the paucity of US dollars in the official window. As foreign currency demand for covert transactions surged, the local currency lost ground against the US dollar on the parallel market, closing at about N1,490 per greenback.
The NAFEM rate traded within the range of N1,390 – N1,514.8 but closed at N1,485.5/USD in the spot market. This points towards a depreciation of -0.2% or N3 in the official window last week.
The naira closed at an average of N1,485.3 per greenback at the informal currency market yesterday. According to data from FMDQ, total NAFEM turnover declined by -41.7%, or -USD419.4 million, to close at USD585.5 million on Friday.
Meanwhile, the NAFEM window recorded an inflow of USD 499.9 million. It is worth noting that there was no inflow from the CBN for the second consecutive week, according to the Coronation Research note. Foreign portfolio investors (FPIs) accounted for 31.7% of the market supply, non-bank corporates 37.7%, exporters 29.2%, and others accounted for 1.4%.
In the global commodity market, crude oil prices witnessed slight volatility, in the absence of any significant driver. Although, players anticipate summer fuel demand and tensions on the Israel-Lebanon border,.
Brent crude oil prices dropped by 0.05% to $85.96, while WTI increased by 0.05% to $81.67. Gold prices fell by 0.48% to $2,332.80 per ounce at the time of writing.
