Even though external reserves were increasing, the Nigerian naira continued to suffer in Thursday’s foreign exchange markets as spot FX prices continued to weaken.
In the absence of foreign exchange intervention by the Central Bank of Nigeria (CBN), the naira’s buying power was further undermined by the heightened demand for US dollars and other foreign currencies.
Analysts predict that the local currency’s future is still grim due to the CBN’s lack of support and its willingness to acquire from interested sellers. The naira’s capacity to challenge foreign currency supremacy at the official and informal FX window has been hampered by the market’s poor FX liquidity.
Data from the FMDQ platform for daily exchange rate quotations showed that the naira depreciated against the US dollar by 0.15%, closing at ₦1,510.10.
Eligible demand for FX outpaced the supply side in the official window amidst divergent expectations on future exchange rate projections.
In the parallel market, the naira depreciated slightly to N1,505 per US dollar as invisible FX demand climbed further. The nation’s external reserves crossed $34 billion yesterday due to additional inflows from various sources.
In the global commodity market. Brent crude advanced by 1.05% to $86.14 per barrel, and WTI crude rose by 0.95% to reach $81.67 per barrel.
