Naira Trades Positive as NAFEX Turnover Jumps
The Nigerian local currency, the naira recorded a gain in the investors, and exporters’ foreign exchange market yesterday after data shows improved US dollar transaction volumes.
Data from FMDQ Exchange showed that the local currency strengthened against the greenback, trading lower at N462.25 from N462.78 on the previous day. Similarly, the parallel market appreciated by 0.18% to N741 from N742.
In a market note, Coronation Merchant Bank research unit reported that the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate traded within the range of N446-466.0 per United States dollar on Friday.
FX analysts said the spot FX rate than closed at N462.3, pointing towards an appreciation of +0.2% or N0.8 last week. In the forwards market, fx traded within the range of N467-478.8 per US dollar.
In the 1-month contract, fx remained unchanged to close the week at N469.7, and in the 3-month contract, fx depreciated by -1% to close at N496.2 at the same time. Also, in the retail secondary market intervention sales (SMIS) market, the fx spot rate remained unchanged to close at N462.
Analysts said they noted that in the parallel market, the Naira closed at an average of N745 on Friday, a level that placed the gap between the NAFEX and parallel market rate at 61.2%.
Citing data from FMDQ, analysts said NAFEX turnover increased by +2.5% last week to USD325.1 million on Friday. The NAFEX window recorded an inflow of USD161.9 million with the CBN accounting for 3%, FPIs accounting for 4.7%, non-bank corporates accounting for 46.8%, exporters accounting for 40.5%, and others accounting for 5%.
With a record increase in Nigeria’s external reserves, up +0.1% to USD35.3 billion, analysts at Coronation said they expect the NAFEX rate to trade range-bound (N440/USD – N465/USD) in the near term.
Last week, the Chinese Yuan (CNY) depreciated by -0.1% against the Nigerian naira to close at N66.7, according to data from the CBN. #Naira Steadies as Banks Issue Update on FX Purchase
