Naira Slides at Investors Window, Black Market Steadies
The Nigerian naira slides at the Investors and Exporters foreign exchange (FX) window on Tuesday as demand outpaced supply level –key driver being a higher demand for foreign currencies for imports.
At the official window, market participants exchanged the local currency for a United States dollar a higher amount compared with the previous day’s rate amidst scarcity of the greenback. Investors’ FX rate tallies with N430 per the United States dollar position at forward market.
Data from the FMDQ Exchange platform indicated that the Naira depreciated to N430.67, a 0.16% higher than N430 exchange rate on Monday. However, parallel market rate was steadied at N675, according to channel checks.
According to market data, the open indicative rate closed at N429.88 while an exchange rate of N432 was the highest rate recorded within the day’s trading before it settled at N430.67.
The Naira sold for as low as N417 to the dollar within the day’s trading. A total of 50.40 million was traded in foreign exchange at the official investors and exporters window on Tuesday.
As the inflation rate widened to 19.64% in July, market analysts see further pressure on the local currency across the FX market. Analysts’ consensus remains that the Nigerian naira is relatively overvalued but the apex bank has maintained a stance not to devalue the local currency amidst macroeconomic pressures.
A Naira devaluation would worsen the cost of living index given that inflation has peaked at 17 years high and it is expected to rise further due to pressures on the food index.
A large number of listed companies, especially consumer goods operators continue to record FX losses in their books due to trade imbalances as Nigeria relies heavily on imported goods for manufacturing purposes.
# Naira Slides at Investors Window, Black Market Steadies#