SAT MAY 03 2025-theGBJournal| The naira firmed by 0.4% w/w to N1,589.00 against the U.S dollar by close of official market trade Friday, supported by the Central Bank of Nigeria’s (CBN) c.US$116.20 million intervention.
In the forwards market, the naira rates appreciated across the 1-month (+0.2% to N1,646.57/USD), 3-month (+0.6% to N1,724.19/USD), 6-month (+0.5% to N1,837.00/USD) and 1-year (+0.9% to N2,056.24/USD) contracts.
Meanwhile, gross FX reserves increased after six consecutive weekly declines, growing by USD135.96 million w/w to USD37.93 billion (April 30).
While demand pressures in the FX market seem to have moderated, risks to stability remain heightened due to persistent global uncertainties that could continue to hinder capital inflows in the short term.
Consequently, FX liquidity may stay below optimal levels, sustaining pressure on the naira and likely necessitating ongoing CBN interventions to support the currency.
In a separate development, total inflows into the Nigerian Foreign Exchange Market (NFEM) fell by 5.7% m/m to USD3.67 billion in April (March: USD3.90 billion), according to FMDQ data.
Cordros Research analysts in a note to the Government and Business Journal, attributed the outturn to the decline in inflows from foreign sources (17.9% of total inflows), which fell by 16.5% m/m to USD657.40 million (March: USD787.20 million), marking the lowest level of inflows in seven months.
Consequently, inflows from the other corporates (-40.5%) and FPI (-15.7% m/m) segments recorded lower accretion, while inflows from the FDI (+112.7% m/m) segment increased.
At the same time, inflows from local sources (82.1% of total inflows) declined marginally by 2.9% m/m to USD3.02 billion (March: USD3.11 billion) driven by declines in inflows from the exporters/importers (-23.9% m/m) and non-bank corporates (-23.3% m/m) segments, amid a surge in the inflows from the Individuals (+125.4% m/m) and CBN (+43.8% m/m) segments.
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