See Exchange Rate Tonight As Naira Continues To Depreciate Against Dollar

Naira consolidated at its lower range in the P2P market and black market while the dollar ticked higher on Monday as focus turned to a string of upcoming economic readings and the United States Apex Bank statement for market guidance on when the U.S Fed could begin trimming interest rates.

On the P2P market, an unofficial market actively traded by crypto traders, retail investors, and speculators, the naira traded at about N1272/$ in the early hours of Monday from the weekend’s rate of N1255/$.

In addition, the exchange rate for a dollar to naira on the physical black market buy averaged at about N1,260 against the greenback

Speculators maintained their grip on the greenback despite reports stating that Afrexim Bank successfully disbursed the first tranche of the $3.3 billion crude oil repayment loan to the Nigerian National Petroleum Company Limited (NNPC).

 

See Exchange Rate Tonight As Naira Continues To Depreciate Against Dollar

 

The multinational-owned bank highlighted that the initial payment would be about $2.25 billion, with the final payment of$1.05 billion will be processed later

The FG hoped such a deal would counteract foreign exchange backlogs, which analysts attribute to the naira’s appalling performance.

According to NNPC, the facility will improve the local currency’s performance against the US dollar and other major currencies as well as increase liquidity in the Forex market.

The markets anticipate that the CBN, motivated mainly by its reaffirmed commitment to maintaining price stability, is likely ready to follow a possibly divergent course at its next meeting, which takes place this month.

Increases in interest rates over time may not only lessen inflationary pressures but also slow capital flight, which may cause the value of the naira to rise.

The dollar index was up by about 0.1% in London trade on Monday, as markets appeared to have largely maintained their expectations of early interest rate cuts by the Federal Reserve.

The US Dollar Index’s failed breakout at above 103 index points and sharp bearish reversal suggests that a near-term peak may be in play for the naira and the path of least resistance should give the naira some buying time to recover.

Nigeria’s naira is likely its band this week at the official market as businesses resume activity as bulls remain neutral on the dollar index

Currency traders were pricing in a 70% likelihood of a 25-basis point drop in March, according to the CME Fedwatch tool, up from a 64% possibility observed a week earlier.

Data released on Friday revealed that the producer price index inflation decreased more than anticipated in December, supporting bets on early rate reduction.

However, data indicating a higher-than-expected increase in CPI inflation for the month came before the report.

Focus was now on addresses by a slew of Fed officials this week, which are likely to provide fresh indications on the bank’s plans to decrease interest rates this year.

Later this week, U.S. retail sales data is also anticipated to be released, and it is anticipated to influence the nation’s inflation forecast.