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Tuesday, 17 December 2024

Naira Trades Mixed as US Dollar Inflows Drop 15%


The naira displayed mixed performance in foreign exchange markets, reflecting ongoing efforts to determine its true value. Data from the FMDQ platform revealed a 15% decline in US dollar inflows, impacting exchange rates across different trading windows.

In the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira gained 0.38%, closing at N1,544.05 per US dollar on Tuesday as demand pressure eased. Transactions ranged between N1,510 and N1,560 per dollar, supported by adequate FX liquidity. However, US dollar inflows at the NAFEM window fell to $1.04 billion, down from $1.22 billion the previous week, according to Coronation Merchant Bank Research.

A breakdown of inflows showed that foreign portfolio investors contributed 39.66%, non-bank corporates 37.08%, exporters 19.24%, the Central Bank of Nigeria (CBN) 1.65%, and other sources 2.37%.

Meanwhile, at the Bloomberg BMatch platform, the naira weakened by 0.7%, trading at N1,553.19 per dollar, according to Cordros Capital Limited.

In global markets, oil prices declined due to weak Chinese economic data and investor caution ahead of the U.S. Federal Reserve's interest rate decision. Brent crude was priced at $73.12 per barrel, while WTI stood at $70.27. Gold prices also fell to $2,636.89 per ounce, pressured by a stronger U.S. dollar and rising Treasury yields as markets anticipated a gradual approach to interest rate cuts in 2025.

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