The Nigerian naira rose against the US dollar in the foreign exchange market on Monday, according to statistics from the FMDQ Exchange platform.
On Monday, the naira rose by 0.04% to ₦1,579.22 per US dollar in the Nigerian autonomous foreign exchange market, owing to consistent demand and supply of hard currencies.
The authority is seeking to increase US dollar inflows into the economy. The Debt Management Office issued $500 million in domestic US dollar bonds today with a coupon rate of 9.75% aimed at ordinary investors. The action is important because a foreign currency scarcity has undermined the naira price discovery process in the FX market.
While the balance in Nigeria’s external reserves is steady above $36.5 billion, a significant part of the amount has been pledged, reducing the Central Bank’s war chest to defend the local currency.
The latest data on the movement of the nation’s external reserves reveals that there have been successive outflows of funds. Last week, the foreign reserves fell by more than $300 million.
This happened after Apex Bank used more than $820 million to buy the local currency from authorised dealer banks at its first-ever retail Dutch auction system. The CBN Dutch auction calendar has not been released, signifying the move to back the naira in the forex market will be intermittent.
Meanwhile, the naira closed at an average of ₦1,580 per US dollar due to steady demand from invisible FX users in the informal currency market. In the global commodity market, Brent crude fell by 0.68% to $79.14 per barrel, and West Texas Intermediate (WTI) crude dropped by 0.61% to $76.19 per barrel.
