Naira firms across FX markets

The naira Monday strengthened against the dollar at all segments of the foreign exchange market on the back of improving liquidity.

It gained N14.32k against the greenback to close at N317.34k/$ on Monday. This represents 4.44 percent compared with N332.07k/$ it closed on Friday, according to data from FMDQ.

The local currency also firmed against the dollar by N4 or 1.01 percent as it closed at N393/$ yesterday from N397/$ on Friday last week, BusinessDay findings show.

At the autonomous market, it gained N5 to close at N385/$, which was 1.28 percent stronger than N390 traded on Friday.

“We believe the exchange rate will remain pressured in the interim until autonomous players return to the market to relieve the CBN of its role of major dollar supplies at the interbank. We are of the view that the depreciation of the naira, the reforms in the FX market coupled with current attractive yield environment should buoy foreign investor sentiment in Nigerian assets and aid the vital return of foreign capital to the market,” analysts at Afrinvest Securities Limited said.

The liquidity crunch in the foreign exchange market continued last week as the local unit further depreciated week-on-week. At the interbank, spot rate hovered between N312/$ and N317/$ from Monday to Thursday last week. However, intraday spot rates rose as high as N320/$ and N327/$ on Tuesday and Thursday last week, before the apex bank intervened with dollar supply on both days. The interbank spot rate closed at N332.07/$ on Friday.