• Saturday, June 22, 2024
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Naira seen rising further this week, opens flat at 1,120/$ on black market

Naira closes flat at official market as dollar sales decline by 17.84%

The foreign exchange (FX) market opened on Monday with the naira, Nigeria’s currency exchanging flat with the US dollars at 1,120 on the parallel market, also called the black market, and is expected to appreciate further this week across markets.

This represents a N5 appreciation compared to N1,125 per dollar closed on Friday on the black market, according to the data collated from various street traders and the online exchange rate collating platforms.

The naira recorded a four-month high of 1,142.38 per dollar at the official foreign exchange (FX) market as dollar supply increased on Friday.

The summary of the FX auction released by the FMDQ Securities Exchange, revealed that the Naira gained 7.72 percent as the dollar was quoted at N1,142.38 on Friday, stronger than N1,230.61/$1 quoted on Monday last week at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

Dollar supply rose by 124.08 percent to $281.34 million on Friday from $125.55 million recorded on Monday at NAFEM.

The intraday high closed at N1,265 per dollar on Friday, weaker than N1,261/$1 quoted on Monday. The intraday low appreciated by N100/$1 as the dollar was quoted on the spot at N1,100 on Friday, stronger than N1,200 quoted on Monday.

Nigeria’s foreign currency reserves declined 1.2 percent week/week to settle at US$33.4bn as of April 4, 2024. “We attribute the decline in reserves to the continuous interventions by the Central Bank of Nigeria (CBN) in the FX market along with draw-downs to settle obligations, a report by Afrinvest Securities Limited said.

The report noted that Brent benchmark crude Oil price increased 0.5 percent week/week to settle at $90.71/bbl, following heightened tensions in the Middle East as Israel is reportedly threatening an assault on Iran over allegations of providing support to Hamas.

According to the report, at the NAFEM window, the Naira appreciated 9.5 percent week/week against the base currency (USD) to exchange at N1,142.38/ $1. In the parallel market segment, Naira gained 0.4 percent w/w against the USD to settle at N1,230.00/$1.

The activity level waned as daily average turnover in the NAFEM segment plunged 44.2 percent w/w to settle at $374.1m as at April 8, 2024.

“We anticipate that the Naira would continue to strengthen as the CBN intensifies efforts to bolster liquidity in the market,” analysts at Afrinvest said.