Naira Skids as FX Reserves Fall by $1.1bn in 24hrs
Following more than $1.1 billion outflow in 24 hours, the Nigerian local currency, the Naira depreciated against the United States (US) dollar on Thursday, exchanging N461.50 at the investors’ and exporters’ window.
The FX spot rate represented a decrease of 0.06 per cent when compared to the N461.24 which it exchanged to the dollar on Wednesday. Demand for the United States dollar has continued to rise amidst a persistent surge in import bills.
Unfortunately, inflows have been low, and intermittent, though global prices of crude oil remain above budget target. Weak crude oil production remains downside to FX accretion into Nigeria’s foreign reserves.
Also, there is an allegation that some exporters that raise forex via the official window have devised means to take foreign currency inflows outside the window to obtain higher rates elsewhere.
Market data showed that the open indicative rate closed at N461.50 to the dollar on Thursday. A spot exchange rate was used for trading within the day before it settled at N461.50.
The Naira sold for as low as N462.04 to the dollar within the day’s trading. The total turnover traded at the official Investors and Exporters window was also determined on the spot.
After receiving about $1 billion early in the week, the Central Bank of Nigeria (CBN) has reported an outflow of more than $1.1 billion from external reserves. As of March 29, Nigeria’s gross external reserves declined to $35.567 billion from $36.667 billion a day earlier.
Some analysts said the outflow may not be unconnected with import bills payment, settlement of FX backlog, and weekly FX auctions to support the exchange rate. Naira Skids as FX Reserves Fall by $1.1bn in 24hrs