Naira Falls Across FX Markets on Renewed US Dollar Shortfall
The Nigerian naira came under pressure in the official and parallel markets this week, with exchange rates weakening due to thin US dollar volume racing against demand.
In contrast, the US dollar is trading with a firmer bias against trading partners at the global forex markets today but is mostly within yesterday’s range.
At the official window, the local currency lost slightly, with most swings recorded as market records significant FX inflows reduction in November.
The local currency lost 0.07% to close at ₦1,442.43/$ in the official window, while the parallel market fell more sharply by 1.15% to ₦1,472/$, indicating diminished appetite for the naira.
The Central Bank of Nigeria (CBN) daily FX showed that the spot rate hit an intraday high of N1444.95 per dollar, which was better than the previous day’s quote of N1445.50.
This showed that while there was increased demand for dollars above the supply level, the pressure was minimal. Foreign reserves ended the week at $43.43 billion, increasing by about 0.18% from the previous week’s close of $43.35 billion amidst oil price swings.
Oil prices increased this week due to supply fears after the Black Sea port of Novorossiisk halted oil exports. This happened following a Ukrainian drone attack that hit an oil depot in the major Russian energy hub.
Precious metals were mixed this week, with gold and silver rising while platinum fell as investors rotated between safe-haven bets and metals more tied to industrial demand.
The Dollar Index was sold to almost 99.00, its lowest level this month, and it is holding at the same level on Friday. DXY also settled below the 20-day moving average. Nigerian Exchange Rises to N93.5trn after Plan to Review Tax
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