The naira weakened slightly at the official market on Wednesday, closing at N1,340 to the dollar from N1,337 recorded a day earlier, according to figures published by the Central Bank of Nigeria.
During the session, data from the Nigerian Foreign Exchange Market revealed the currency changing hands between N1,328 and N1,340, with an average rate of N1,337.17. Though small, the movement shows persistent pressure in the foreign exchange industry.
The local currency fell to N1,400 from N1,382.5 on the parallel market, losing ground. The N60 official-to-street rate differential suggests ongoing segregation despite efforts to change.
The News Chronicle noted that the most recent depreciation occurred as fresh global demand for the U.S. dollar emerged, following minutes from the most recent Federal Reserve meeting that show policymakers are not hastening to lower interest rates.
After the release, Treasury yields rose, and the dollar strengthened against major currencies, including the yen and the euro.
Domestic policy changes by the apex bank have concentrated on resolving FX backlogs, increasing liquidity, and rekindling investor confidence. Recent changes have been relatively limited when compared with the strong swings seen during earlier stages of exchange rate changes.
According to analysts, the direction of world interest rates and constant foreign exchange inflows will be important influences on the movement of the naira over the next several weeks.
