Naira trades at N1,635.15/$ as liquidity drops at NAFEM

On Monday, the naira traded at N1,635.15 per dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), marking the first trading day of the week.

This shows a slight decline of 0.24 percent against the dollar, compared to the N1,631.21 rate recorded on Friday at NAFEM, Nigeria’s official foreign exchange (FX) market, as reported by data from the FMDQ Securities Exchange Limited.

The dollar supply from willing sellers and buyers fell by 47.04 percent to $126.24 million on Monday, down from $238.36 million recorded on Friday at NAFEM.

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According to the FX market summary from the FMDQ, the intraday high closed at N1,649 on Monday, up from Friday’s close of N1,679. The intraday low on Monday was N1,549, up from N1,580 on Friday.

In the parallel market, also known as the black market, the naira depreciated to N1,675 on Monday. This represents a loss of N10 or 0.6 percent compared to N1,665 quoted on Friday in the black market.

Breaking its winning streak, the Naira at the NAFEM window depreciated by 5.54 percent to N1,631.21/$1 last week, according to a report by Coronation Asset Management.

Renewed demand, likely stemming from travel and tuition payments, weighed on the market.

By contrast, the naira in the parallel market appreciated by 1.80 percent, closing at N1,670.00/$1; we think the market was supported by the CBN’s supply of $20,000 to Bureaux de Change.

Consequently, the premium of the official rate to the street rate narrowed to 2.38 percent.

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The CBN’s published gross foreign reserves closed the week up by 1.36 percent (or $517.01m) to close at $38.58bn.

Olayemi Cardoso, governor of the CBN, said speculative trading had decreased, and the currency market was gradually stabilising.

“By improving transparency and providing better oversight of forex transactions, we are sending a clear message that the CBN is committed to ensuring fair and efficient markets,” he stated.