As FX paparazzi slows down, Nigeria’s negative volatile domestic currency, the naira, had minor value loss in the official window on Thursday.
The currency rate in Nigeria’s independent foreign exchange market had been trending upward for weeks, indicating no influence from the unofficial currency market.
In order to affect the direction of the exchange rate, the apex bank has started selling US dollars at a lower spot rate after limiting the foreign exchange spread for Bureau de Change operators operating in the black market.
However, when the leadership of the Central Bank of Nigeria (CBN) informed the world that Yemi Cardoso’s monetary power is not supporting the naira, the market’s attitude has turned negative since the start of the week.
Since this week, the volume of US dollar requested from various imports payments at the official window outpaced the supply side, creating imbalance between warring forces.
The nation’s foreign external reserves climbed to $32.117 billion, according to latest update on the CBN website. There have been accretion into the gross external reserves since the beginning of the week as against a total balance of $32.106 billion last week Friday.
According to information obtained from FMDQ Securities Exchange, the Naira experienced a 0.10% depreciation against the US dollar, settling at ₦1,309.88 as the official rate.
In the parallel market, exchange rate has worsened to ₦1,400 even after the CBN announced subsided FX sales of $10,000 at N1,021 at the beginning of the week.
Inconsistent support for the naira is responsible for its latest downward movement, analysts said in a chat with MarketForces Africa.
“No matter how we look at it, demand and supply remain the only unbiased resources allocators in every economy. If there is strong FX inflows sufficient enough to meet US dollar demand, the naira would gain – vice versa. Any other measure is shortermist and it will always bounce back on exchange rates across forex markets”
In the global commodities market, prices of crude oil experienced a negative outcome. Brent crude decreased by 0.52%, to close at $87.44 per barrel, and West Texas Intermediate (WTI) crude saw a decline, dropping by 0.68% to $82.14 per barrel.
