Naira Trades in Red Ahead of World Bank Disbursement
The naira ended the week in red against the dominant US dollar in the foreign exchange market as demand and supply continues to test effectiveness of Nigeria’s willing buyer, willing seller FX policy.
In the foreign exchange market, the Naira depreciated against the US dollar by 0.17%, closing at ₦1,483.99 per unit of greenback, according to data obtained from FMDQ Securities Exchange platform.
The pressure on the naira exchange rate stemmed from sustained demand surge for foreign currency, outpacing the supply side due to weak FX market intervention and offshore participation.
At the parallel market, the naira strengthened by 1.41%, ending the day at N1,465 per US dollar. Data from the official trading platform of the FMDQ Exchange, a platform that oversees the Nigerian
Autonomous Foreign Exchange Market (NAFEM), revealed that the Naira lost N2.50 from spot rate of N1,481.49 per US dollar on Thursday. However, the volume of currency traded increased to $269.27 million on Friday, up from $213.31 million recorded on Thursday.
According to data from the Central Bank, Nigeria’s FX reserves increased by USD109.89 million this week to USD32.80 billion. Also, volume of US dollar traded at the official market declined by 56.3% to USD827.49 million on Thursday, with trades consummated within the N1,250 – N1,520.00 range, according to analysts.
Cordros Capital Limited expects the forthcoming World Bank meeting, where a $2.20 billion loan facility for Nigeria is expected to be approved, with an initial partial disbursement ($750.00 million, subject to request), to offer short-term support for the naira.
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