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HomeBusinessNigerian naira depreciates on Parallel Market, closes stronger on I&E window

Nigerian naira depreciates on Parallel Market, closes stronger on I&E window

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…Gains in Dangote Cement drive up equities market

By Samuel Bankole

Nigeria’s currency, the naira, experienced further depreciation on the parallel market on Tuesday, trading at N830 to the U.S. dollar compared to the previous day’s rate of N825.

However, the naira closed stronger on the official window, benefiting from continued interventions by the Central Bank of Nigeria (CBN) to support the currency’s value.

In the Investor’s and Exporters’ Foreign Exchange (I&E FX) market, the naira appreciated, with the dollar quoted at N742.93 in contrast to the previous day’s closing rate of N795.28.

Currency dealers noted that despite the abolishment of multiple exchange rates in the country, the availability of dollars to end users remains inadequate. Many manufacturing firms and importers continue to rely heavily on the autonomous window to fulfill their foreign exchange requirements.

Meanwhile, the local stock market ended on a positive note, with the All Share Index rising by 1.31 percent to close at 63,766.72 points.

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This increase was primarily driven by gains in Dangote Cement and Sterling Bank. The market capitalization of equities listed on the Nigerian Exchange Group (NGX) also grew, reaching N34.722 trillion compared to the previous close of N34.273 trillion.

Trading activity recorded a total volume of 868.803 million units valued at N42.81 billion in 8,970 deals. Market breadth was positive, with 50 gainers and 20 losers.

The NGX 30 Index also rose by 1.52% to close at 2,327.35 points, reflecting an improvement from the previous close at 2,292.44 points.

Dangote Cement contributed significantly to the market capitalization, registering a 6.67 percent gain in share value, while Sterling Bank experienced an 8.19 percent increase. Other notable gainers included Ecobank Transnational Inc, International Breweries, and Unilever, which rose by 5.73 percent, 5.43 percent, and 5.02 percent respectively.

The upcoming meeting of the CBN’s Monetary Policy Committee (MPC) is anticipated to address the challenge of soaring inflation resulting from fuel subsidy removal and currency depreciation.

With the June inflation rate standing at 22.79 percent, analysts expect the regulatory bank to consider further tightening measures to manage inflation, which was at 22.41 percent in May 2023.

(omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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