LunagisthubNaira Slips to 1,456.72/$: What’s Behind the Currency’s Volatility?
The naira has recorded a negative trading performance, weakening by 0.99% to 1,456.72/$ at the official Nigerian Foreign Exchange Market. This decline is attributed to strong demand for dollars and softer inflows, which have put pressure on the currency
Several factors have contributed to the naira’s volatility, including
Strong demand for dollars: The demand for dollars has been high, putting pressure on the naira.
Softer inflows: Inflows have been softer, failing to meet the demand for dollars.
-CBN interventions: Despite interventions by the Central Bank of Nigeria (CBN), the naira has continued to face pressure.
Market analysts expect the naira to remain volatile in the short term, with some predicting a steady but watchful stance in the coming week. The CBN’s ongoing efforts to maintain a firmer macro-liquidity backdrop and support overall market stability are expected to provide some stability to the currency
– The naira’s volatility is a concern for investors and businesses.
– The CBN’s interventions have not been enough to stabilize the currency.
– Market analysts expect the naira to remain volatile in the short term.
The Monetary Policy Committee (MPC) is set to meet this week, and market analysts expect a dovish call, with a possible rate cut to sustain the bonds rally. The sustainability of FX stability will depend on effective management of Foreign Portfolio Investor (FPI) sentiment and other economic fundamentals
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