Naira Weakens to N1,392 Amid Dollar Liquidity Crisis and Market Pressures
The Nigerian naira weakened against the US dollar in the foreign exchange market on Wednesday as persistent FX liquidity shortages deepened, market participants reported.
The local currency reached an intraday peak of N1,392 per US dollar at the official exchange window midweek, underscored by scant dollar availability against escalating demand from international obligations.
The naira concluded Wednesday’s trading session at N1,380.0775 per US dollar at Nigeria’s Foreign Exchange Market (NFEM), per the Central Bank of Nigeria’s daily FX update – up from N1,370.6373 on Tuesday.
Throughout Wednesday’s market hours, transactions were executed in a narrow range between N1,368 and N1,392 at the official window, as sustained foreign exchange payment obligations intensified strain on limited hard currency reserves.
The Central Bank disclosed that NFEM interbank FX turnover remained stable at $125.588 million across 126 transactions, compared to $125.314 million on Tuesday, according to its market monitoring data.
Interbank Forex market activity has experienced volatility in recent weeks amid significantly reduced Central Bank of Nigeria interventions, with official support for the local currency suspended for over six weeks.
A resilient US dollar has maintained downward pressure on emerging market currencies globally, driven by the Federal Reserve’s resolute tight monetary policy stance. Multiple oil-exporting African currencies demonstrated depreciation trends against cross-currency benchmarks, according to consolidated forex market analytics.
Concurrently, Nigeria’s foreign exchange reserves continued their upward trajectory, reaching $51.142 billion by Central Bank records – surpassing Tuesday’s level of $51.060 billion.
Global energy prices declined to near pre-Iran conflict levels on Wednesday following sustained transit operations through the Strait of Hormuz, fueling market speculation about the resolution of Middle East supply constraints.
West Texas Intermediate crude futures relinquished earlier gains to close at $70.34 per barrel after briefly dipping to $69.63 – marking the first sub-$70 settlement since March 2, 2023.
Brent crude contracts, serving as the global benchmark, retreated 4.3% to settle at $73.74 per barrel – their lowest level since preceding US-Israeli military action against Iran initiated February 28.
Banking Sector Indices Decline on N2.5 Trillion Market Capitalization Erosion
