Exchange Rate Falls to N1,380/$ as Naira Sold Off
The naira dropped sharply against the US dollar at the Nigerian Foreign Exchange Market (NFEM) on Tuesday as FX payments surged above liquidity.
Naira was sold off again, reflecting increased demand for foreign currency, with foreign portfolio investors staying short in Nigerian markets. This boosted demand for foreign currency, especially the dominant US dollar, while the naira was persistently sold off.
Daily FX data published by the Central Bank revealed heightened pressures on the local currency, which hit an intraday high of N1385, a significant depreciation from N1370 quoted in the previous day.
The local currency traded at an intraday low of N1367.5000 per dollar, amid growing NFEM interbank turnover. The Apex Bank daily FX publication released showed that interbank turnover rose to $98.829 million across 78 deals, up from $76.65 million.
In the parallel market, the local currency dropped to N1390 per dollar, reflecting broad-based selling pressure across both the official and informal foreign exchange segments.
Nigeria’s gross external reserves were last reported at $48.389 billion, according to data from the Central Bank’s window, though global oil prices remain elevated.
Oil hit $110 for the first time in three weeks on Tuesday as the US and Iran appeared to make little progress towards a peace deal that would unlock energy supplies through the Strait of Hormuz.
Brent crude, the international oil benchmark, rose as much as 4 per cent to highs of $112.70 a barrel on Tuesday, putting pressure on government bond markets as investor worries over inflation grew. It later drifted back to $111. NGX Tops N147trn as Bua, Aradel Rally, Investors Gain N3.3trn