SAT OCT 19 2024-theGBJournal| The naira appreciated this week by 2.5% w/w to N1,600.78/USD at the Nigerian Autonomous Foreign Exchange Market (NAFEM) following the Central Bank of Nigeria’s (CBN) intervention at the official window, selling c. USD64.00 million to authorized dealers.
Notably, the country’s FX reserves maintained its upward trend, USD206.16 million w/w to USD38.88 billion (16 October), marking the 7th consecutive week of accretion partly due to FX purchases from Foreign Portfolio Investors (FPIs).
Total turnover at the NAFEM as of 17 October decreased by 33.1% WTD to USD1.22 billion, with trades consummated within the N1,540.00/USD – N1,682.00/USD band.
In the forwards market, the naira rates decreased across the 1-month (-1.5% to N1,699.15/USD), 3-month (-1.4% to N1,770.51/USD), and 6-month (-0.4% to N1,862.89/USD) contracts, while it increased on the 1-year (+0.9% to N2,067.69/USD) contract.
Barring any shock, we anticipate the naira will remain less volatile in the short term as the CBN maintains intervention in the FX market.
This will also be supported by the improved FPI inflows into the FX market due to carry trade opportunities in the capital market.
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