Naira Falls as Foreign Obligations Crack External Reserves

The naira depreciated against the US dollar in the foreign exchange amidst declining external reserves.  The Nigerian Foreign Exchange Market (NFEM) experienced sustained demand pressure for foreign currency amid limited supply, keeping the market largely bid.

According to Spot FX pricing on FMDQ platform, the naira exchange rate depreciated by 0.35% to N1,511.63 per greenback as demand eclipsed the amount the supply side. Transactions at the Nigerian autonomous FX market was consummated between N1,500 and N1,518.00, investment banking firms said in their separate notes.

The local currency pulled back from gaining streaks since last week as the Apex Bank’s FX intervention sales eased.  Last week, Nigerian autonomous FX market recorded an inflow of US$871.30 million, the CBN accounted for 9.97% of the total inflow.

Details revealed that foreign portfolio investors (FPIs) accounted for 32.12% of the total inflows, non-bank corporates contributed 32.95%, and exporters supported the system with 24.20% of the inflows, while other sources accounted for 0.76%.

Reports obtained by MarketForces Africa revealed that the Central Bank sold US dollar to banks on Monday, but demand pressure has been heavy in the official window. This pressures also filtered into the parallel market due to slowed down in FX supply. Hence, exchange rate in the black market has continue to decline – mostly this week,

According to channel check, the parallel market rate fell to N1,590 per US dollar. This week, external reserves declined to $39.221 billion due to successive decline associated with surging foreign obligations settlements. Oil prices dropped by over 2% after U.S. President Donald Trump made his first significant diplomatic move toward ending the Ukraine war,

According to analysts, this has been a key factor in supporting oil prices due to supply concerns. Brent crude declined by $1.82, or 2.36%, closing at $75.18 per barrel, while U.S. West Texas Intermediate (WTI) crude fell $1.95, or 2.66%, to settle at $71.37.

Meanwhile, gold prices remained stable, supported by safe-haven demand amid growing fears of a global trade war triggered by Trump’s new tariffs. Investors also processed hotter-than-expected U.S. inflation data. Spot gold held steady at $2,895.30 per ounce while U.S. gold futures edged down 0.1% to $2,928.70. #Naira Falls as Foreign Obligations Crack External Reserves FG Takes Leap Towards Fiscal Excellence With Revised Cash Management Policy

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