SAT AUG 24 2024-theGBJournal| The naira achieved its highest single-day appreciation (+3.1%) on 21 August since 22 July, when it gained 6.4%, before closing the week at N1570.14/US$1 (+0.6% w/w) at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Total turnover at the NAFEM (as of 22 August) declined by 16.2% WTD to USD664.29 billion, with trades consummated within the N1,470.00/USD – N1,603.00/USD band.
In the forwards market, the naira rates depreciated across the 1-month (-0.5% to N1,623.59/USD) and 6-month (-1.6% to N1,782.42/USD) contracts but appreciated across the 3-month (+0.4% to N1,681.93/USD) and 1-year (+1.6% to N1,972.27/USD) contracts.
Despite the CBN’s FX retail auction, we highlight persistent demand pressures causing the naira to trade with high volatility during the week. In the near term, we anticipate the naira will remain pressured owing to weak supply.
Nigeria’s FX reserves declined for the third consecutive week as the gross reserves level weakened by USD63.50 million w/w to USD36.44 billion (22 August).
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