Naira relapses to N940/$ despite oil surge - THE NATION
SEPTEMBER 15, 2023
The naira yesterday relapsed to a record low of N940/$ at the parallel market as demand pressures continued to confront declining dollar supply.
However, at the Investors and Exporters ((I&E) window, the local currency closed at N758/$, creating a N182 gap between the official and parallel market rates.
The current naira depreciation happening at a period of crude oil prices spike surprised many market analysts and forex dealers.
Crude oil prices yesterday reached $98.19 per barrel data from the Central Bank of Nigeria (CBN) website showed.
The surge in crude oil prices was due to supply disruptions in Libya and expectations of further U.S inventory draw.
The rate also represents the widest market between both rates since the Central Bank of Nigeria (CBN) Acting Governor, Folashodun Shonubi, announced plan to clear estimated $10 billion backlog in two weeks.
The uptick in crude oil prices analysts said should help naira recovery at the official and parallel markets.
Oil prices hit a 10-month high owing to supply cuts by Russia and Saudi Arabia.
Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said Saudi Arabia will further extend supply cuts to December adding that Brent prices are expected to rise to further before year end.
Rewane added that global crude oil supplies expected to improve on refinery maintenance.
On forex backlog clearance, the CBN boss Shonubi said the apex bank is working with commercial banks to clear the forex backlog through different structures within the forex market.
Shonubi said the banks, which controls 75 per cent of the forex transactions will play significant role in seeing that the backlogs go.