Naira Breaks Out Above N1600/$ in Official FX Market

The Nigerian local currency, the naira, disappointed the bulls’ forecasts on Thursday as the exchange rate breakout after intermittent FX sales across currency markets.

In the official market, the naira closed at ₦1,603.80 per dollar, a 1.08% depreciation from the previous close. The market witnessed elevated eligible demand for US dollar on Thursday.

Exchange rate was kept below N1600 band last week, appreciated to N1500 on Monday due to US dollar sales to both informal, and parallel markets authorised FX dealers.

FX liquidity in the currency market remained depressed despite apex bank interventions sales efforts.  In the parallel market, the naira closed the day at an average of N1,565 per US dollar, according to channel check despite 1.5% capped on FX sales to invisible FX users in the informal currency market.

According to information obtained from the CBN website, Nigeria’s gross external reserves climbed further to $36.374 billion, covering more than 11 months of import based on latest trade data.

In the global commodity market, crude oil prices experienced notable declines on Thursday.  West Texas Intermediate (WTI) crude futures closed at $77.28 per barrel, and Brent crude settled at $81.09 per barrel. WTI futures dipped below $77 per barrel, marking their lowest level in over six weeks.

This decline was driven primarily by weak demand from China, which overshadowed positive US inventory data. China’s reduced oil imports and lower refinery activity, attributed to sluggish economic growth, exerted downward pressure on prices.

Additionally, ongoing ceasefire negotiations between Israel and Hamas raised expectations of reduced supply risks, further contributing to the drop in oil prices. #Naira Breaks Out Above N1600/$ in Official FX Market  Nigeria, Angola Inflation Highest in Frontier Markets -ReportThe post Naira Breaks Out Above N1600/$ in Official FX Market appeared first on MarketForces Africa.