SAT, DEC 09 2023-theGBJournal|The value of the Naira to the dollar depreciated by 1,854 bps week-on-week to print at N1099.05/$ this week at the Nigerian Autonomous Foreign Exchange Market (NAFEM), with total turnover at the market (as of 07 December 2023) crashing by 19.5% WTD to USD487.45 million.
Trades were consummated within the N700.00 – N1176.00/USD band.
In the Forwards market, the naira depreciated across the 1-month (-3.9% to N911.46/USD), 3-month (-5.0% to N936.69/USD), 6-month (-7.5% to N984.35/USD) and 1-year (-7.5% to N1037.79/USD) contracts.
The pressure on local currency is expected to persist in the near term.
Nonetheless, we expect foreign investors to keenly watch the development in the FX space with regards to the expected FX inflows as guided by the authorities, Central Bank of Nigeria’s recent actions in clearing its FX backlogs, and firm direction of short-term interest rates.
Meanwhile, Nigeria’s FX reserves remained pressured this week, declining for the fifth consecutive week by NGN93.70 million w/w to NGN32.88 billion (7 December).
Looking ahead, we expect FX liquidity conditions to remain tight, pending receipt of expected FX inflows. Thus, we expect the pressure on the local currency to persist in the near term.
X-@theGBJournal|Facebook-the Government and Business Journal|email:gbj@govbusinessjournal.com| govandbusinessj@gmail.com
