Naira closes weak at N1,421 on official market

The naira, on Wednesday closed at N1,421/$ at the Nigerian Autonomous Foreign Exchange Market (NAFEM) according data from FMDQ Securities.

This represents a 1.27 percent depreciation from N1,403/$ quoted on Tuesday at NAFEM.

The dollar supplied by willing sellers and willing buyers increased by 2.5 percent to $164 million on Wednesday from $160.77 million recorded on Tuesday.

During the daily trading, the intraday high was quoted flat at N1,440/$ lower than N1,445 per dollar on Tuesday. The intraday low closed at N1,335 stronger than N1,301 on Tuesday.

Likewise, at the parallel market also known as the black market, the naira weakened by 0.34 percent to N1,450/$, from the N1,445/$ quoted yesterday, according to traders who spoke with BusinessDay.

Analysts at Coronation Registrars Limited have said that the uncleared backlog from businesses and investors contributed to the FX market’s instability.

“The backlog of FX demand from investors and businesses may still be an issue. Although an audit designated some US$2.4bn of these demands as not legitimate, that does not remove the demand itself. And, it will likely take months to clear all the various backlogs. So, we expect the FX market to be unsettled for a while, but with the potential to stabilise considerably later in the year,” they stated.

Last week, the gap between the official and street markets had been cleared. However, analysts at Coronation Registrars Limited stated that it did not signify the liberalisation of the FX market.

Instead, it is expected that the gap between both markets may widen in the coming days.