Naira on Thursday appreciated against the dollar by 0.40 percent at the parallel market, Nigeria’s unofficial market following low demand for the greenback by the end users.
On Thursday morning, the dollar was trading at the rate of N742 the same rate it closed on Wednesday, as against N745 traded since last week on the black market.
At the Investor and Exporters (I&E) forex window, Naira depreciated by 0.10 percent as the dollar was quoted at N463.75 on Wednesday as against the last close of N463.30 on Tuesday.
Most currency dealers who participated in the foreign exchange (FX) auction on Wednesday maintained bids between N460.00 per low rate and N466.00 per dollar, a high rate.
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Nigeria’s external reserves, which gives the Central Bank of Nigeria (CBN) the firepower to defend the naira, have declined by 4.63 percent to $35.38 billion as of April 4, 2023, from $37.10 billion recorded at the beginning of the year on January 4, 2023, data from the CBN showed.
“For exchange rate, we expect a slow and steady depreciation as experienced in recent years,” analysts at FSDH Merchant Bank limited said in a new report.
The analysts said the currency will continue to face pressure from high import costs and demand for foreign currency for services but the CBN will continue to intervene in the FX market to limit the pace of depreciation.
“The possibility for crucial exchange rate reform in H1 2023 is limited and such reform can only happen in the second half of 2023 on the insistence of a new President. Currently at $36 billion, external reserves which can finance about 6-7 of imports of goods and services will also face pressure in 2023,” the analysts said.
