Nigeria’s Naira strengthened to N806. 73 to the dollar at the official foreign exchange (FX) market on Tuesday, as against N837.77 to the greenback which it closed at, on Monday.
Dealers said the local currency’s appreciation followed a moderation in dollar demand at the official foreign exchange market.
At the close of trading on Monday, the dollar was quoted at N837.77, stronger than N927.19 quoted on Friday at the Autonomous Foreign Exchange Market (NAFEM), data from the FMDQ indicated.
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Willing buyers and willing sellers quoted dollars at a bid rate of N1,021, stronger than N1,160/$1 offered on Friday as the higher bid rate on the spot trading. The lower bid rate remained steady at N701 per dollar on the spot.
Dollar supply decreased on Monday as the daily foreign exchange market turnover dropped by 32.87 percent to $73.93 million from $110.14 million recorded on Friday.
Similarly, the naira recorded a day stability on Tuesday as it closed at N1, 165 to the US dollar, the same rate exchanged on Monday.
In a note to clients, Afrinvest (West) Africa Limited, and investment banking and research firm, observed that Continued foreign exchange (FX) demand–supply imbalance pressured the CBN foreign reserves to shed 1.1 percent month (m/m) in November to close at US$33.0 billion.
Meanwhile, in the currency market segment, the naira witnessed a divergent outing in the NAFEM and parallel market segments.
At the NAFEM segment, the price currency (Naira) weakened 2.1 percent when compared on month-on-month basis against the base currency (US$) to ₦832.32/$1.00 at the end of November.
In the parallel market, the Naira appreciated against the US$ by 0.9 percent m/m to N1150.00/$1.00.
Looking ahead, the Naira is likely to trade within a similar band across FX segments barring any significant changes in market’s liquidity.
Also, in its equity research note, FSDH research acknowledged the recent pickup in activities at the NAFEM following increasingly attractive interest rates in the money market, which could entice trade investors to bring investments into Nigeria.
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