SAT JUNE 29 2024-theGBJournal| The value of the Naira to the dollar weakened by 133 bps week-on-week to print at N1,505.30/$ this week at the Nigerian Autonomous Foreign Exchange Market Window (NAFEM).
The total turnover (as of 27 June) at the market advanced by 29.1% WTD to USD845.03 million, with trades consummated within the N1,4110.00/USD –N1,577.00/USD band.
In the forwards market, the naira depreciated across the 1-month (-1.0% to N1,521.26/USD), 3-month (-1.8% to N1,577.88/USD), 6-month (-1.9% to N1,652.47/USD) and 1-year (-2.4% to N1,811.77/USD) contracts.
We point out that the frail liquidity in the FX market underpinned the increased volatility on the naira this week as interventions by the CBN remain muted, together with weak offshore participation. In the short term, we anticipate the naira remaining under pressure, barring any significant FX interventions from the CBN.
Meanwhile, Nigeria’s FX reserves grew for the fourth consecutive week, as the gross reserves level increased further by USD442.47 million w/w to USD34.14 billion (27 June), attributable to increased oil earnings and a possible receipt of a part of the IMF’s Development Policy Financing (DPF) loan.
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