SAT MAY 18 2024-theGBJournal|The value of the Naira to the dollar weakened by 212 bps week-on-week to print at N1,497.33/$ this week at the Nigerian Autonomous Foreign Exchange Market Window (NAFEM) as the central Bank of Nigeria (CBN) intervened thrice in the week with total FX sales of c.USD211.00 million.
At the NAFEM, the total turnover (as of 16 May) at the market increased by 33.6% WTD to US$1.14 billion, with trades consummated within the N1,301.00 – N1,593.00/USD band.
In the Forwards market, the naira recorded decreases across the 1-month (-2.8% to N1,520.16/USD), 3-month (-2.4% to N1,567.97/USD), 6-month (-1.9% to N1,631.82/USD) and 1-year (-1.9% to N1,767.52/USD) contracts.
Market liquidity improved compared to the previous week, driven by increased FX supply from the CBN to banks and mildly rekindled interest from Foreign Portfolio Investors (FPIs), stemming the naira’s volatility.
Looking forward, we expect FX liquidity to improve, supported by inflows from FPIs even as the CBN sustains their intermittent interventions.
Nevertheless, analysts at Cordros Research say they think that market liquidity may be insufficient to trigger a significant appreciation in the naira.
Meanwhile, Nigeria’s FX reserves grew further this week as the gross reserve improved by US$195.01 million to US$32.64 billion (16 May).
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