Naira Crosses N1500 after FX Turnover Falls by 42%

The naira got dirty as the exchange rate continued to worsen across forex markets amidst zero FX intervention following the Central Bank of Nigeria’s (CBN) strong stance on the willing buyer, willing seller policy decision.

According to information obtained from the FDMQ platform, the naira exchange rate depreciated further by N10.59 kobo, or 0.71%, to N1,500.79 per US dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

Analysts attribute the recent negative exchange rate fluctuation to US dollar scarcity in the official window following the pause on periodical FX market intervention. In the parallel market, the local currency lost against the US dollar, closing near N1,490 per greenback as foreign currency demand for invisible transactions increased.

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. #Naira Crosses N1500 after FX Turnover Falls by 42% Ways and Means Securitisation Responsible for N24trn Debt Rise – DMO
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