SAT AUG 10 2024-theGBJournal|The Retail Dutch Auction by the apex bank on Tuesday helped ease pressure on the Naira by close of Friday’s trading, with the naira appreciating by +2.7% w/w to N1,574.20/USD at the NAFEM.
USD 876.26 million in bids were met out of USD 1.18 billion at the auction.
Foreign Portfolio Investors (FPI) participation in the FX market improved as the CBN’s move to stabilize the naira increased investor confidence.
While we anticipate FX liquidity will remain frail over the short-term, we expect the naira to trade with less volatility due to the moderation in demand pressure.
Total turnover at the window (as of 08 August) decreased by 58.7% WTD to USD472.67 million, with trades consummated within the N1,520.00/USD – N1,628.00/USD band.
In the forwards market, the rate recorded on the 1-month (+0.2% to N1,622.10/USD) contract increased, but was unchanged on the 3-month (N1,684.56/USD) contract. Elsewhere, the rates declined on the 6-month (-0.9% to N1,773.76/USD) and 1-year (-1.9% to N1,959.58/USD) contracts.
Meanwhile, this week, the Nigeria’s FX reserves improved further, albeit at a slower pace, as the gross reserves level grew by USD12.06 million w/w to USD36.85 billion (08 August).
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