The Nigerian currency Naira has gained with the US dollar falling at the black market.
Naira’s value has risen significantly as economists express renewed optimism about the currency’s future.
Despite Analysts predicting a depreciation of the currency at the Investors Window, Nigeria’s currency has soared in value.
Even though the naira gained value against the US dollar this week, analysts are dissatisfied with what they see as an exorbitantly expensive local currency, and they expect further devaluation at the Investors and Exporters foreign exchange rate window.
According to data from the FMDQ Exchange platform, the Nigerian currency, the Naira, traded at a rate of ₦413.75/$1 to the dollar this week, up 0.54 per cent from the previous week, when the Naira closed at ₦415.07. Meanwhile, it had depreciated earlier in the week from N414.8/$1 recorded on Tuesday to close at N415.07/$1.
The naira has been under increased pressure as a result of a $4 billion inflow of foreign currency borrowings and around $3.5 billion in special drawing rights, briefly exceeding the ₦420 mark at the foreign exchange window for investors and exporters in December.
Nigeria External reserve
Nigeria’s external reserve fell by 0.06 per cent on Thursday, November 25th, 2021, to $41.3 billion, a decrease of $24.77 million from the previous day’s total of $41.33 billion.
The apex bank’s continuous intervention in ensuring the exchange rate’s stability is to blame for the country’s declining reserve level. In the last three trading sessions, the official window exchange rate has remained stable.
It’s worth noting that the country’s foreign reserve increased by $5.99 billion in October as a result of the federal government raising $4 billion through the issuance of Eurobonds on the international debt market.
The previous month’s gains were higher than the $2.76 billion gain in September 2021. Meanwhile, Nigeria’s reserves have fallen by $519.39 million so far in November, despite a year-to-date gain of $5.93 billion.
Price of crude oil
The crude oil market was bearish in the previous week as a result of the new variant of the covid disease, trading in the region of $70 per barrel, its lowest level since September 2021. However, in the early hours of Monday, the market saw a rebound, with Brent crude rising 3.78 per cent to $75.47 per barrel.
Additionally, West Texas Intermediate rose 4.53 per cent to $71.24 per barrel. Natural gas, on the other hand, fell 6.87 per cent to $5.101.
The market had been unresponsive to the US government’s announcement that it would release 50 million barrels of oil from its strategic reserve to lower the soaring price of gasoline. Crude prices fell sharply in the previous week as a result of a new strain of the virus that has proven to be vaccine-resistant.
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