The naira on Monday closed at the rate of N1,596.60 as dollar liquidity declined at the official foreign exchange (FX) market.
This represented a 1.66 percent loss compared to N1,570.14 closed on Friday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), data from the FMDQ Securities exchange Limited indicated.
Volume of transactions reduced as the daily FX market turnover dropped by 14.80 percent to $102.93 million on Monday from $120.81 million recorded on Friday.
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The intraday high was quoted at N1,610 per dollar on Monday as against N1,606/$. The intraday low closed at N1,500 on Monday from N1,496 closed on Friday at the NAFEM.
At the parallel market, also known as the black market, the naira gained N5 as the dollar was quoted at N1,610 on Monday compared to N1,615 on Friday.
The exchange rate at the NAFEM window closed at N1,570.14/US$1, appreciating by 0.62 percent on the week after touching a high during the week of N1,543.84/US$1. This moderated the year-to-date depreciation against the US dollar marginally to 42.23 percent (42.58% the previous week, according to a report by Coronation Asset management.
Conversely, the parallel market rate fell 1.23 percent on the week to N1,620.00/US$1. The CBN published a gross foreign exchange reserve loss 0.23 percent, or US$84.68m, closing the week at US$36.44 billion.
“Nigeria’s fixed income markets are enjoying a surfeit of liquidity, as the schedule of government borrowing has largely run its course. Yet there are downsides. Inflation is only slightly below its peak. And Naira liquidity has a tendency to head to the foreign exchange markets, where the official rate strengthened but the parallel rate deteriorated last week. We think the authorities will want to hold rates high for a few months yet,” analysts at Coronation said.
