Naira Rises Without CBN FX Market Intervention

The Nigerian local currency gained weight in the foreign exchange market at the beginning of the week following an announcement of additional FX backlog repayment by the apex bank.

Data from FMDQ revealed that Naira appreciated by 1.47% to close at N856.57 to the US dollar. In the parallel market, the Naira closed at N1,238 per dollar. 

The strengthening of the local currency comes despite the monetary authority’s 3-month absence in the forex market intervention.

The Central Bank of Nigeria (CBN) said it has remitted $61 million to foreign airlines with an additional payment of more than $2 billion FX backlog transmitted to some deposit money banks.

Nigeria’s naira has suffered from low FX inflows amidst rising import demand from manufacturers, invisible FX users and other entities in the importation category.

Last week, the exchange rate at the Nigeria Autonomous Foreign Exchange Market (NAFEM) moved within the range of N700 – N1,268 per USD but closed at N869.39 on Friday.

In the parallel market, the Naira closed at an average of N1,230 on Friday, leaving the FX spread at 41.5% as the official rate appreciated.

According to data from FMDQ, the volume of US dollar traded at the autonomous FX window decreased by -26.0% or -USD107.1 million last week to USD305.1 million.  Dangote Reacts to EFCC Visit to Headquarters

The NAFEM window recorded an inflow of USD15.3 million, according to Coronation Research. Analysts said there were no injections made by the CBN for the eleventh consecutive week.

However, foreign portfolio investors (FPIs) accounted for 38.7%, non-bank corporates accounted for 33.7%, exporters accounted for 7.4%, and others accounted for 20.2%.