The naira weakened against the US dollar in the official market, as foreign exchange (FX) turnover in the Nigerian Autonomous Foreign Exchange Market (NAFEM) dropped by 14%.
According to data from the FMDQ platform, fresh demand pressures caused the naira to fall by N20 (1.31%), closing at N1,545 per US dollar. AIICO Capital Limited reported that FX transactions on the NAFEM window ranged from N1,515 to N1,557 per dollar.
Coronation Research noted that NAFEM turnover declined by 14.13% (US$345.20 million), amounting to US$2.10 billion last week. The inflow at the NAFEM window totaled US$1.22 billion, with contributions from various sources: the Central Bank of Nigeria (CBN) (8.07%), foreign portfolio investors (41.34%), non-bank corporates (26.29%), exporters (21.22%), and other unidentified sources (3.1%).
Despite tight forex liquidity and surging demand, the naira appreciated marginally on the electronic trading platform, gaining 4 basis points to close at N1,548.46 per US dollar in the Electronic Foreign Exchange Matching System.
Global Commodity Market Update
In the global commodity market, oil prices climbed by 1%, driven by expectations of increased demand from China following the announcement of economic stimulus plans. Brent crude traded at approximately $72.99 per barrel, while WTI stood at around $69.40.
Gold prices also rose after inflation data aligned with expectations, boosting the likelihood of a Federal Reserve rate cut. Gold was priced at about $2,714.83 per ounce.
Market sentiment will continue to be influenced by geopolitical and macroeconomic events, according to analysts, and investors will be eagerly watching the next U.S. Producer Price Index (PPI) data for clues about monetary policy.
