The naira weakened slightly in the official foreign exchange (FX) market on Tuesday after Dangote Petroleum Refinery began selling petroleum products in U.S. dollars, a move that has heightened demand for foreign currency and raised concerns about renewed pressure on the exchange rate.
BusinessDay earlier reported that Dangote Petroleum Refinery had stopped selling petrol, diesel and aviation fuel in naira, switching all product sales to dollar pricing. The decision is expected to increase demand for dollars among fuel marketers and could push pump prices higher in Africa’s largest oil-producing economy.
Data published by the Central Bank of Nigeria (CBN) showed that the naira depreciated by N3.43 at the Nigerian Foreign Exchange Market (NFEM), closing at N1,383.08 per dollar on Tuesday, compared with N1,379.65 on Monday, representing a 0.25 percent decline.
The local currency, however, strengthened in the parallel market, where it appreciated by N5 to N1,420 per dollar from N1,425 on Monday. As a result, the gap between the official and parallel market rates narrowed to N37 per dollar from N46 recorded a day earlier.
Activity in the interbank FX market strengthened significantly. The number of deals rose sharply to 140 on Tuesday from 85 on Monday, while total turnover surged by 182.20 percent to $243.09 million from $86.14 million.
