Naira Drops to N776.50 over Weak FX Supply
The Nigerian local currency, the Naira, lost the fight against the dominant foreign currency, the United States (US) dollar at the investors’ and exporters’ foreign exchange market on Thursday.
The exchange rate closed at N776.50 per greenback as a result of forex supply shortage in the market. The local currency had gained 6.01% to N741.64 in the midweek amidst market consensus that the naira is undervalued after a large FX devaluation seeking to converge multiple exchange rates.
Similarly, in the parallel market, the Naira experienced a further depreciation of 1.14% against the US dollar, reaching N885 amidst a sustained rally in the global oil market.
Marking a six weeks gain, Brent crude oil price rose 0.79% to $83.86 per barrel yesterday. Also, WTI crude gained 1.13% to $80.39 per barrel on an expectation of improved demand in the United States after large inventories fall.
Analysts said oil futures were higher as investors assessed the impact of extended output cuts by Russia and Saudi Arabia alongside the prospect of improved US demand following a record decrease in US crude stock.
Elsewhere, gold was hovering around $1,937 per ounce (+0.18%), as investors traded cautiously ahead of the US non-farm payroll data. #Naira Drops to N776.50 over Weak FX Supply