The naira faltered against the US dollar in the currency market on Tuesday as FX liquidity level was drained by increase demand for imports, and other related payments.

The naira has continued to lose momentum as the country continues to struggle to keep its head high, despite multiple macroeconomic issues testing the political sagacity of President Bola Tinubu.

The FX reform has spillover, and it has affected all aspects of life in Nigeria over the Central Bank of Nigeria’s willing buyer, willing seller stance as it sought exchange rate convergence in a country that depends largely on imports.

Many companies are facing a near-distress threat due to huge FX losses. While some companies are able to renegotiate, others have not been lucky enough to untie themselves from foreign currency exposures.

While the apex bank maintained its claim that the local currency is grossly undervalued, a weak net FX balance has reduced the authority’s war chest to defend the local currency – with a fight to finish against FX speculators.

According to data from the FMDQ platform, exchange rate lost about 1% in today’s trading session to close at N1592.06 per US dollar at the Nigerian autonomous forex market (NAFEM)

The naira depreciated by 0.81% in the official market, closing at ₦1,592.06 per US dollar. Likewise, in the parallel market, the naira slipped by 0.32%, ending the day at ₦1,590 per dollar.

At the current market trend, the gap between exchange rates at the official and informal currency markets has narrowed to N2 on each US dollar.

Last week, the NAFEM rate traded within the range of N1,495 – N1,607.5, closing at N1,579.9 per greenback in the spot market. This points towards a depreciation of -0.4% or N5.7 last week.

The Naira closed at an average of N1,602 on Friday in the parallel market. According to data from FMDQ, total NAFEM turnover increased by +5.8% or USD49.6 million to close at USD907.5 million on Friday. Coronation Research reported that the NAFEM window recorded an inflow of USD423.8 million.

Breakdown showed that foreign portfolio investors (FPIs) accounted for 30.6% of the inflow. The CBN boosted the US dollar volume with 20.1% contribution to the sum. Non-bank corporates accounted for 20.9%, exporters supply was 24.2%, and others category accounted for 4.2%.

In the global commodities market, Crude oil prices dropped following previous session’s decline due to concerns about demand in Asia and ceasefire discussions in the Middle East.

Brent prices decreased by 0.59% to $77.20, while WTI prices fell by 0.58% to $73.94. Meanwhile, gold prices rose by 0.07% to $2,543.20 per ounce.