Nigeria’s currency, naira, took a dip in the foreign exchange (FX) market on Monday as the local currency closed lower against US dollar at both official and parallel markets.
Low supply and the rising demand of the greenback to settle international payments have been major drivers of depreciation of the local currency.
FMDQ’s FX spot data showed that naira depreciated by 0.19%, closing at N1,512.58 per dollar on Monday.
The Nigerian Foreign Exchange Market (NFEM) continued to experience strong demand for foreign currency, resulting in a mostly bid market.
However, there was a noticeable increase in dollar liquidity today, AIICO Capital Limited said, noting that most transactions took place within the range of $/N1,450.00 to $/N1,520.00.
Similarly, the naira ended the day at N1,570 per dollar in the parallel market, losing N10 following mild demand pressures following dollar scarcity.
Oil prices remained largely stable as investors kept an eye on potential peace talks between Russia and Ukraine, which could alleviate sanctions affecting the energy supply.
Meanwhile, a weaker dollar and decreased supply from the Caspian region limited selling pressure.
Brent crude futures rose by 12 cents to $74.86 per barrel, and U.S. West Texas Intermediate crude increased by 20 cents to $70.94 per barrel.
Gold prices climbed back above $2,900 an ounce due to the weaker dollar and looming trade war concerns, with spot gold up to $2,896.41.
The fundamentals indicate an oversupply of oil this year as the market grapples with how U.S. tariffs may hinder demand growth and the possible easing of Russian sanctions.
