• Tuesday, June 18, 2024
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BusinessDay

Naira firms as FX features contract records $579.3m sales

naira

naira

In spite of the persistent shortage of dollar, naira yesterday slightly appreciated in value at the interbank market. It gained N0.34k against the greenback to close at N294.23k, about 0.12 percent compared with N294.57k it closed the previous day, according to data from FMDQ.

Meanwhile, there was no intervention by the Central Bank of Nigeria (CBN) but traders disclosed that transaction worth $380,000 was made yesterday at 1150 GMT, more than three hours after the market opened.

Currency dealers said yesterday that the lack of liquidity had curbed activity, leaving the central bank as the main supplier of dollars at the interbank market.

The local currency fell against the dollar by N3 and N7 at the autonomous and parallel markets, respectively. It closed at N365/$ yesterday, representing 0.83 percent decline from N362/$ on Tuesday at the autonomous market. At the parallel market, it closed at N375/$, about 1.90 percent drop from N368/$ the previous day, BusinessDay findings reveal.

However, a total of $579.3 million has been sold in futures contracts ranging between one month and one year. A one-month contract for $26.7 million due on July 27 was sold at N279.

In non-deliverable forward markets, the one-month naira-dollar forward was quoted at 314.50. The one-year contract fell as low as 345.13 per dollar.

Currency traders had on Monday introduced a maximum resale premium on dollar trades to try to boost liquidity after a transaction made without spreads sent the naira tumbling to a record intra-day low.

Investors have welcomed the removal of currency controls but many are still steering clear until Africa’s biggest economy shows signs of a concrete recovery, Reuters report.