SAT MAY 04 2024-theGBJournal|The value of the Naira to the dollar weakened by 457 bps week-on-week to print at N1,400.40/USD this week at the Nigerian Autonomous Foreign Exchange Market Window (NAFEM).
We highlight that the CBN sold c. USD42.00 million to banks this week in the range of N1,200.00 – N1,220.00. At the NAFEM, total turnover (as of 02 May) decreased by 34.1% WTD to USD871.20 million, as trades were consummated within the N1,060.00 – N1,451.00/USD limit.
In the Forwards market, the naira rates recorded on the 1-month (-4.1% to N1,409.48/USD), 3-month (-3.7% to N1,447.73/USD), 6-month (-3.4% to N1,495.35/USD) and 1-year (-3.1% to N1,628.44/USD) contracts decreased.
Based on the data obtained from FMDQ, total inflows into the NAFEM declined by 48.1% m/m to US$1.95 billion in April (March: USD3.75 billion).
The breakdown provided showed a broad-based decline across the local (75.4% of total inflows) and foreign sources (24.6%). Local inflows declined by 33.6% m/m to USD1.47 billion (March: USD2.21 billion) due to weaker inflows from non-bank corporates (-47.4% m/m), CBN (-35.1% m/m), and Exporters (-19.1% m/m) amid substantial increases in Individuals’ inflows (+96.8% m/m).
Similarly, inflows from foreign sources came in lower, declining by 68.9% m/m to USD478.10 million (February: USD1.54 billion) as foreign investors began selling off risk assets to find safe havens amidst the lingering FX issues and weak macroeconomic environment.
Meanwhile, Nigeria’s FX reserves settled higher this week as the gross reserves level grew by USD132.68 million to USD32.28 billion (02 May).
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