Naira on Monday fell by 0.4 percent against the U.S dollar following increased demand for the greenback, by mostly politicians, ahead of the gubernatorial election, traders said.
After trading on Monday, the local currency depreciated to an average rate of N753 per dollar, down from N750, last week at the parallel market.
The naira will trade flat at N760 – N780/$ in March 2023, said Bismarck Rewane, managing director/chief executive officer of Financial Derivatives Company Limited.
In 2022, naira lost 23.65 percent (year-on-year) against the dollar at the parallel market, popularly known as the black market.
At the Investors and Exporters (N461.67I&E) forex window Naira depreciated by 0.04 percent as the dollar was quoted at on Monday as against the last close of N461.50 on Friday.
Read also: Old naira notes legal tender until Dec 31- CBN
Most currency dealers who participated at the foreign exchange auction on Monday maintained bids between N446.00 and N462.44 per dollar.
External reserves, which gives the CBN the firepower to defend the naira lost 0.97 percent in February 2023 to close at $36.71bn from $37.07bn at the beginning of the year due to sustained interventions in the forex market by the Central Bank of Nigeria (CBN),exacerbated by limited oil earnings due to bloated oil subsidy payments.
Rewane noted in his March 2023 presentation that major sources of forex inflows are falling.
Foreign Direct Investment (FDI) fell by 5.04 percent while Foreign Portfolio Investment (FPI) declined by 20.91 percent and this will further contribute to the depletion of the external reserves.
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