The gap between official and parallel market exchange rates narrowed to N21.34 as the naira continued to depreciate in the Nigerian autonomous foreign exchange market.
According to spot FX data from the FMDQ trading site, the naira closed at ₦1,538.66 per dollar, down 0.34 percent during the official window. On the parallel market, however, the currency rate was steady at N1560 to the US dollar.
Within the official market, exchange rates fluctuated between N1,535.00 and N1,540.00 prior to closing at N1,538.66. The Central Bank has been facilitating the sale of US dollars to banks as a measure to maintain robust market supply.
Despite these efforts, the exchange rate has been experiencing a gradual decline. Analysts anticipate that the CBN will intervene within the forex market to provide support to the naira. Otherwise, the naira could experience a rapid depreciation.
FX market analysts and investment banking experts predict that the naira will continue to trade within the fluctuating range as long as the interest rate environment remains appealing to foreign portfolio investors.
Short-term capital has continued to circulate within the Nigerian financial market, with a focus on OMO bills. The CBN appears to have subtly reduced OMO issuance, with only one offering in February and March.
Following the recent influx of capital, the nation’s foreign reserves increased to $38.322 billion on Wednesday, up from $38.303 billion at the commencement of the week, amidst fluctuations in oil prices.
Within the global commodity market, oil prices experienced a slight increase on Thursday, approaching a one-month high due to global supply concerns, although gains were tempered by concerns regarding the economic impact of new U.S. tariffs.
Brent crude futures advanced by 9 cents, or 0.1 percent, to $73.88 per barrel, while WTI crude gained 20 cents, or 0.3 percent, to $69.85. Meanwhile, gold climbed to a new high as investors sought safe-haven assets despite growing trade tensions and weakening global markets. Spot gold hit an all-time high of $3,059.30, and then rose 1.2 percent to $3,057.12 an ounce.
