Naira declines by 0.17% at official market

Naira has depreciated by 0.17 per cent yesterday at the official Investors and Exporters (I & E) Window as the Central Bank of Nigeria (CBN) struggles to sustain its float-management stance.Information Guide Nigeria

According to trading report obtained yesterday, naira deprecated to N463.67 per dollar as against its previous close of N462.88 per dollar.

This comes as the apex bank seeks to sustain its controlled rate at the official window, despite some 300 basis points gap between the official rate and the parallel market rate.

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THE NATION reports that most participants at the official foreign exchange (forex) window maintained bids between N460.00 and ?466.00 per dollar.

Amidst dwindling inflows and apprehensions over the country’s forex management framework, Nigeria’s foreign exchange (forex) reserves had hit a new low at $35.39 billion last weekend.

The nation’s external reserves had dropped by $111.10 million to $35.39 billion at the weekend, its 11th consecutive weeks of decline.

Nigeria’s forex reserves had lost more than $1.82 billion in nearly three months of a free fall. Official forex reserves status data report obtained from the CBN indicated that forex reserves had depleted from $37.211 billion by January 16, 2023 to $35.39 billion at the weekend.NYSC Portal

As reported by THE NATION,

Nigeria’s external reserves, which closed 2022 at about $37.08 billion, had picked at $37.211 billion on January 16, 2023. Nigeria’s external reserves

Nigeria’s external reserves has since been on the decline, dropping to lower level every week over the past 10 weeks.

Also, most analysts agreed that Nigeria’s shaky forex reserves position and currency crisis were directly due to the CBN’s currency management stance.

Analysts at Cordros Capital said they believed the forex crisis “will remain over the short-to-medium term” as there is no positive signal that denotes an improvement in forex supply relative to the pre-COVID-19 levels.

“Moreover, considering the tepid accretion to the reserves given low crude oil production and elevated premium motor spirit (PMS) under-recovery costs, foreign portfolio investors (FPIs) who have historically supported supply levels in the Investors & Exporters Window will be needed to sustain forex liquidity levels in the medium to long-term,” Analysts at Cordros Capital attributed the persistent slowdown in capital importation to foreign investors’ lacklustre interest in the country “given an unclear foreign exchange framework, an uninspiring macro narrative, elevated global interest rates, and heightened global uncertainties”.JAMB Result

Cordros Capital stated at the weekend: “While we believe a new government will be a breather for the country in the short term as sentiments are likely to improve, we think foreign capital inflows will remain low compared to pre-COVID levels over the medium term in the absence of significant reforms in the forex, fiscal and monetary policy frameworks.”

Afrinvest stated: “Specifically, the prominence of capital controls to manage the ongoing forex crisis complicates fund repatriation from Nigeria and, by the same token, discourages new investments by offshore players.”

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