Naira loses 1.25% week-on-week at official window, settles at N1,536/$

• The naira lost 1.25 per cent week-on-week at the official window to settle at N1,536/$
• It gained N12 against the dollar at the parallel market week-on-week to close at an average of N1,568/$
• The depreciation of the naira at the official window comes amid the naira-for-crude debacle and the Central Bank of Nigeria’s interventions

The naira lost 1.25 per cent of its value week-on-week in the past week to settle at 1536.89/$ at the official window on Friday, March 21.

The Central Bank of Nigeria (CBN) data showed that the naira started the past week on a weak note at 1,528.03/$, down from 1,517.93/$ in the previous trading session.

The local currency further depreciated to 1532.93/$ before rebounding on Wednesday and Thursday. It, however, fell to 1536.89/$1 at the end of the trading session on Friday, March 21.

Depreciation comes amid naira-for-crude debacle, CBN interventions

The depreciation of the naira at the official window comes amid reports over the stalling of the naira-for-crude agreement between the Nigerian National Petroleum Corporation Limited (NNPCL) and local refineries.

The naira-for-crude impasse led to the temporary suspension of the supply of petrol in naira by Dangote Refinery, citing an imbalance between its sales proceeds and crude oil purchase obligations, which are denominated in US dollars.

The development may lead to further pressure on the foreign exchange market, according to analysts and oil marketers, as petroleum marketers may resort to selling petrol in dollars to Nigerians or would have to source large amounts of US dollars to purchase petroleum products.

However, the parties involved will be returning to the dialogue table this week to sort out their differences with the possibility of extending the contract.

The fall of the naira against the greenback continued despite efforts by the CBN to boost foreign exchange supply to banks and Bureaux De Change (BDC) operators.

Analysts say the CBN’s interventions may only provide temporary relief without structural reforms to address Nigeria’s prolonged foreign exchange challenges.

Experts at Cowry Assets Management Limited forecast a mixed outlook in the forex market as users and speculators continue arbitrage exploitation.

“Looking ahead, we anticipate a mixed outlook for the naira as demand pressures for the greenback intensify, with FX users and speculators continuing to exploit arbitrage opportunities.

“Nevertheless, we expect the CBN to sustain its weekly interventions to stabilise the local currency,” they said.

Naira gains N12 week-on-week at parallel market

The naira gained N12 against the dollar at the parallel market in the past week, as it appreciated by 0.77 per cent week-on-week to close at an average of N1,568/$.

Researchers at Afrinvest reported that the naira closed at 1565/$ in the parallel market last week.

The CBN’s foreign reserves was reported to have declined by 0.06 per cent from $38.37 billion to $38.35 billion as of Thursday, March 20.

Researchers at Cowry Assets Management attributed the decline to the CBN’s continued efforts to defend the local currency amid minimal foreign exchange inflows into the economy.

Naira appreciates slightly amid speculation, experts cite forex system evolution

Meanwhile, TheRadar earlier reported that data from the Central Bank of Nigeria (CBN) showed that the naira appreciated by 0.16 per cent to 1,530.52/$ at the close of trading on Wednesday, March 19, from 1,532.93/$ in the previous session.

The naira traded as high as 1,545/$ and reached a low of 1,500/$, which was lower than Tuesday’s figures.