Naira faces dual pressure: Official rate stable, black market hits new price

• The naira remained unchangeable astatine the authoritative FX marketplace aft the CBN injected $86.6 cardinal to easiness request pressure, closing astatine N1,548.52 per dollar
• While it appreciated somewhat implicit the week astatine the NAFEM market, the spread betwixt authoritative and parallel rates widened, with the second closing astatine N1,605 per dollar
• Economists foretell the naira whitethorn support a constrictive scope if firm and FPI inflows persist, though request pressures could bounds further gains

Legit.ng writer Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

Following the Central Bank of Nigeria’s (CBN) merchantability of implicit $86.6 cardinal past week, which eased marketplace request pressure, the naira remained unchangeable astatine the authoritative overseas speech (FX) marketplace connected Monday, 23 June.

The naira remained unchangeable astatine the authoritative FX marketplace aft the CBN injected $86.6 cardinal to easiness request pressure. Photo Credit: CBN, Contributor
Source: Getty Images

According to information from the CBN, the naira experienced a flimsy diminution of 0.07 percent astatine the adjacent of trading, with the dollar quoted astatine N1,548.52. This represents a depreciation of N1.16 from the N1,547.36 it closed astatine connected Friday, 20 June, astatine the Nigerian Foreign Exchange Market (NFEM).

Exporters accounted for 10.87 percent of the inflows, non-bank corporates contributed 13.36 percent, and different sources made up 0.17 percent. The CBN intervened by injecting $86.6 cardinal into the marketplace past week to alleviate unit on FX demand.

On a play basis, the naira gained N1.99 oregon 0.13 percent astatine the NAFEM market, closing astatine N1,547.36 per dollar. Exporters, non-bank corporates, and overseas portfolio investors (FPIs) contributed to the currency’s appreciation. During the week, the naira peaked astatine N1,544.63 to the dollar.

The dispersed betwixt authoritative and parallel marketplace rates continues to widen. The naira depreciated by 0.31% connected the parallel market, closing astatine N1,605 per dollar.

CBN information showed that gross overseas reserves stood astatine $37.71 cardinal arsenic of Thursday, reflecting a diminution of $219.56 cardinal oregon 0.58% from the erstwhile week.

Looking ahead, economists expect that if FPI inflows and proviso from corporates and exporters persist, the naira is apt to commercialized wrong a constrictive set with a flimsy appreciation bias. However, continued request pressures could bounds further gains.

The CBN intervened by injecting $86.6 cardinal into the marketplace past week to alleviate unit connected FX demand. Photo Credit: CBN, Contributor
Source: Getty Images

Market analysts are besides monitoring the increasing disparity betwixt authoritative and parallel marketplace rates, which whitethorn bespeak a segmentation wrong the FX market.

Rewane predicts caller naira against US dollar

Legit.ng reported that Bismarck Rewane, the Chief Executive Officer (CEO) of Financial Derivatives Company, has projected that the naira volition commercialized between N1,600 and N1,650 in the authoritative overseas speech marketplace successful June and July.

Bismarck Rewane, the Chief Executive Officer (CEO) of Financial Derivatives Company, has projected that the naira volition commercialized betwixt N1,600 and N1,650 successful the authoritative overseas speech marketplace successful June and July.

He cited information that indicated effectual measures by the Central Bank of Nigeria to negociate wealth proviso growth, which peaked astatine 78% successful May past year, arsenic the ground for his projection astir the Nigerian currency.

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Source: Legit.ng