SAT NOV 02 2024-theGBJournal| The naira depreciated this week by 4.0% w/w to NGN1,666.72/USD at the Nigerian Autonomous Foreign Exchange Market (NAFEM) despite the Central Bank of Nigeria (CBN) intervening at the official window, selling c. USD77.00 million to authorized dealers.
Elsewhere, the country’s FX reserves grew for the ninth consecutive week by USD326.64 million w/w to USD39.77 billion (30 October).
Total turnover at the NAFEM as of 31 October decreased by 50.0% WTD to USD771.23 million, with trades consummated within the N1,575.00/USD – N1,690.00/USD band.
In the forwards market, the naira rates decreased on the 1-month (-1.2% to NGN1,699.95/USD) contract but increased across the 3-month (+1.3% to N1,732.09/USD), 6-month (+1.0% to N1,848.62/USD) and 1-year (+3.0% to N2,024.79/USD) contracts.
Meanwhile, based on the data obtained from FMDQ, total inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) rose to a five-month high in October, increasing by 40.2% m/m to USD3.04 billion in October (September: USD2.17 billion).
The improvement was primarily due to a substantial increase in inflows from foreign sources (44.6% of total inflows). In comparison, collections from local sources (55.4% of total inflows) dropped for the second consecutive month.
Specifically, inflows from foreign sources increased by 292.7% m/m to USD1.37 billion (September: USD345.50 million), reflecting the highest level in seven months in line with improved carry trade opportunities in the capital market over the review period.
As a result, higher accretions were recorded across the FPI (+510.9% m/m) and FDI (+44.6% m/m) segments, while inflows from other corporate segment (-15.1% m/m) dropped.
Elsewhere, inflows from local sources declined by 7.5% m/m to USD1.69 billion in October (September: USD1.82 billion) driven by declines across collections from the individuals (-30.6% m/m), CBN (-14.3% m/m), and non-bank corporates (-8.6% m/m) segments, amid a marginal improvement in the exporters/importers (+0.6% m/m) segment.
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