SAT MAY 11 2024-theGBJournal|The naira depreciated by 4.5% to N1,466.31/USD at the Nigerian Autonomous Foreign Exchange Market (NAFEM), as the total turnover (as of 09 May) at the market decreased by 47.0% WTD to US$637.69 million.
Trades were consummated within the N1,285.00 – N1,465.00/USD band.
In the Forwards market, the naira rates depreciated across the 1-month (-4.6% to N1,477.91/USD), 3-month (-5.4% to N1,530.14/USD), 6-month (-6.6% to N1,600.66/USD) and 1-year (-6.1% to N1,733.33/USD) contracts.
Nigeria’s FX reserves recorded further accretion this week as the gross reserves level increased by USD89.76 million to USD32.39 billion (08 May).
Analysts note that the persistent tightness in FX liquidity, has contributed to the ongoing depreciation of the naira, with limited inflows from both the CBN and offshore entities.
Notably, there were no inflows from the CBN recorded during the week, and foreign participation in the domestic capital market remained subdued.
Looking ahead, Cordros Research analysts say that risks to Foreign Portfolio Investment (FPI) inflows remain elevated given the prolonged conflict in the Middle East amid CBN’s limited ability to adequately supply the market due to the weak net FX reserves.
As a result, FX liquidity is expected to remain constricted, resulting in sustained pressure on the naira in the short term.
X-@theGBJournal|Facebook-the Government and Business Journal|email:gbj@govbusinessjournal.com|govandbusinessj@gmail.com
