Naira Steadies as Volume of US Dollar Traded Dips
The naira rate was little changed on Friday in the official market as demand for US dollar was met with adequate FX supply. According to data from the FMDQ Securities Exchange platform where official daily spot rate are quoted, exchange rate closed lower at N1485.53 per US dollar.
This translate to marginal daily depreciation of 0.01% from N1485.36 in the previous day amidst expectation that the local currency will recalibrate to its true fair On weekly comparison, the naira depreciated by 0.2% at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
According to FX analysts, the total turnover in the official market declined by 65.0% to USD351.83 million on Thursday, with trades consummated within the N1,390 – NN1,514.82 band.
This week, Nigeria’s FX reserves improved further. Data obtained from the Central bank of Nigeria (CBN) revealed that the gross external reserves level grew by USD297.97 million to USD33.64 billion..
In its commentary note, Cordros Capital Limited said FX liquidity was relatively lower this week, partly due to the shortened holiday week and muted inflows from the CBN.
Analysts highlighted that despite improved inflows from foreign portfolio of investors (FPIs) in line with the CBN’s OMO issuances, the naira depreciated, primarily due to increased demand pressure.
Cordros Capital analysts anticipate an improvement in FX liquidity as the partial disbursement (USD 750.00 million) of the World Bank’s Development Policy Financing loan (USD1.50 billion) allows for more CBN interventions in the FX market.
At the parallel market, the Naira depreciated from N1470 to close at N1,475 per US dollar. Exchange rate at the informal market has been moving slowly behind official rate despite withdrawal of subsidized FX sales to Bureau de Change Operators.
In the global commodity market, Brent crude futures increased by 0.35% to $85.94 a barrel, while U.S. West Texas Intermediate crude futures advanced by 0.26% to $81.45 a barrel. #Naira Steadies as Volume of US Dollar Traded Dips
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