SAT JUNE 08 2024-theGBJournal| The naira appreciated by 0.1% w/w to N1,483.99/US$ at the Nigerian Autonomous Foreign Exchange Market (NAFEM), as the total turnover (as of 06 June) at the market declined by 56.3% WTD to US$827.49 million, with trades consummated within the N1,250.00/USD – N1,520.00/USD range.
In the forwards market, the naira rates recorded on the 1-month (+1.0% to N1,500.26/USD), 3-month (+0.9% to N1,546.11/USD), 6-month (+0.8% to N1,613.06/USD) and 1-year (+2.6% to N1,749.57/USD) contracts increased.
We note the renewed pressure in the FX market stemming from limited intervention by CBN and weak offshore participation. Given CBN’s sporadic FX supply and weak net FX reserves, we anticipate continued pressure on the naira.
Analysts at Cordros Research say they expect the forthcoming World Bank meeting this month, where a USD2.20 billion loan facility for Nigeria is expected to be approved, with an initial partial disbursement (USD750.00 million, subject to request), to offer short-term support for the naira.
Meanwhile, Nigeria’s FX reserves increased by US$109.89 million w/w to USD32.80 billion (06 June).
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