By Isapa Toromoyan
Exchange rates plunged across the currency market due to record amount of the US dollar shortfall in the official and parallel market.
With analysts projecting sustained volatility, the naira depreciated by 15 basis points despite rising balance in nation’s gross external reserves.
FX spot data from the FMDQ platform, the Naira depreciated by 0.15%, closing at ₦1,603.16 per US dollar at the official market.
The declining in the value of the local currency followed increased demand for US dollar at the Nigerian autonomous foreign exchange market on Monday.
Last week, the Central Bank of Nigeria (CBN) defended the naira in the official window by selling $60 million to authorised dealer banks.
The naira is falling while the authority is growing the nation’s external reserves with lower US dollar volume sales to boost liquidity in the official FX market.
Latest data showed the balance in the Nigeria’s foreign reserves inched to about $39 billion, the level seen last in 2022 during oil boom. CBN data revealed that Nigeria now has $38.992 billion as gross balance in the nation’s external reserves.
In the parallel market, the Naira closed at N1,705 per the greenback on the back of sustained increase in demand for invisible payments.
At the current exchange rates in the informal and official market, FX gap has widened to N102, thus creating incentive for speculative currency trading activities.
Oil prices rebounded by over 1% in the global commodities market, after China announced a reduction in its benchmark lending rate. Brent crude climbing to $74.15 and WTI rising to $70.62.
In the precious metals market, gold surged to a record high, while silver approached a near 12-year peak. These gains were fueled by growing uncertainties surrounding the upcoming U.S. presidential election and the ongoing conflict in the Middle East.
Additionally, expectations of easing interest rates further contributed to gold’s rally, which traded at around $2,738.00 per ounce.
