SAT, JAN 06 2024-theGBJournal|Nigeria’s FX reserves started the year with an accretion as the gross reserve level increased by USD129.82 million w/w to USD33.04 billion (03 January).
Accordingly, the naira appreciated by 3.0% to NGN869.39/USD at the Nigerian Autonomous Foreign Exchange Market (NAFEM), with total turnover in the market (as of 04 January 2024) declining by 56.0% WTD to USD169.64 million, with trades consummated within the NGN700.00 – NGN1,268.00/USD band.
In the Forwards market, the naira appreciated across the 1-month (+7.5% to NGN907.02/USD), 3-month (+7.0% to NGN929.47/USD), 6-month (+6.1% to NGN964.05/USD) and 1-year (+4.7% to NGN1,038.50/USD) contracts.
Meanwhile, local currency pressures is expected to remain intact in 2024FY, as we do not expect the one-off dollar inflows in the pipeline (USD3.00 billion NNPC-AFREXIM crude repayment loan and USD1.50 billion World Bank budget support facility) to be sufficient to cater for the teeming FX demand.
Thus, the official exchange rate to is projected by analysts at Cordros Research to depreciate to an average of NGN800.00 – NGN850.00/USD relative to the monetary authority’s desired level.
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