…In the forwards market, the naira rate decreased at the 1-month (-0.4% to N1,506.13/USD), 3-month (-0.1% to N1,550.10/USD), 6-month (-0.2% to N1,620.54/USD) and 1-year (-0.4% to N1,768.74/USD) contracts
SAT JUNE 22 2024-theGBJournal| The naira depreciated by 0.2% w/w to N1,485.53/USD at the Nigerian Autonomous Foreign Exchange Market (NAFEM) at the close of trading Friday.
The total turnover (as of 20 June) at the market declined by 65.0% WTD to US$351.83 million, with trades consummated within the N1,390.00/USD – N1,514.82/US$ band.
In the forwards market, the naira rate decreased at the 1-month (-0.4% to N1,506.13/USD), 3-month (-0.1% to N1,550.10/USD), 6-month (-0.2% to N1,620.54/USD) and 1-year (-0.4% to N1,768.74/USD) contracts.
FX liquidity was relatively lower this week, partly due to the shortened holiday week and muted inflows from the Central Bank of Nigeria (CBN).
We highlight that despite improved inflows from FPIs in line with the CBN’s OMO issuances, the naira depreciated, primarily due to increased demand pressure.
Going forward, we anticipate an improvement in FX liquidity as the partial disbursement (US$ 750.00 million) of the World Bank’s Development Policy Financing loan (US$1.50 billion) allows for more CBN interventions in the FX market.
Meanwhile, Nigeria’s FX reserves improved further this week, as the gross reserves level grew by USD297.97 million w/w to USD33.64 billion (20 June)
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