…FX reserves recorded accretion this week, as the gross reserves level grew by USD226.47 million w/w to USD40.79 billion (19 December)
SAT DEC 21 2024-theGBJournal| The naira appreciated this week by 4bps w/w to N1,547.64/USD at the Nigerian Foreign Exchange Market (NFEM) following the CBN intervention at the official window, selling c. USD197.70 million to authorized dealers.
Notably, the country’s FX reserves recorded accretion this week, as the gross reserves level grew by USD226.47 million w/w to USD40.79 billion (19 December).
In the forwards market, the naira rates decreased on the 1-month (-0.1% to N1,581.39/USD) contract but increased across the 3-month (+0.0% to N1,638.84/USD), 6-month (+0.4% to N1,720.67/USD) and 1-year (+0.3% to N1,895.16/USD) contracts.
FX liquidity is expected to remain suboptimal despite CBN FX intervention as inflows from autonomous sources remain weak.
Barring any significant intervention from the CBN, the naira is likely to remain under pressure and could depreciate from its current level in the medium term.
Meanwhile, the Central Bank of Nigeria on Thursday allowed a temporary access for all existing Bureau DE Change (BDCs) to NFEX for the purchase of FX from Authorised Dealers, subject to a weekly cap of US$25,000.
This window, according to the Central Bank of Nigeria, will open between December 19. 2024 to January 30, 2024.
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