The naira has strengthened further across the foreign exchange (forex) markets amid expectations that the national currency will continue to gain weight in the period ahead.
At the Nigerian Autonomous Foreign Exchange (NAFEM), the naira appreciated by 9.5 per cent to close the weekend at N1,142.38 per dollar. At the parallel market, naira inched up by 0.4 per cent to close at N1,230 per dollar.
At the forwards market, contracts appreciated, underlining the confidence in the stability of the national currency in the meantime.
The on-month contract gained 5.4 per cent to close at N1,212.79 per dollar, three-month forwards rose by 4.3 per cent to N1,248.89 per dollar while the six-month and one-year contracts appreciated by 4.2 per cent and 5.3 per cent to N1,304.74 per dollar and N1,404.46 per dollar.
Daily average turnover at NAFEM dropped by 44.2 per cent to $374.1 million, with trades consummated within the N1,200 and N1,261 per dollar band.
Meanwhile, Nigeria’s forex reserves remained flat at $33.36 billion.
Afrinvest West Africa stated that it expected the naira “would continue to strengthen as the CBN intensifies efforts to bolster liquidity in the market”.
Cordros Capital Group said the apex bank has strategically intervened in the forex market to guide market direction and strengthen confidence.
“This intervention, along with improved forex liquidity, has led to the recent appreciation of the naira. Looking ahead, barring any shock, the naira is expected to remain stable, supported by improved forex liquidity conditions due to sustained inflows from foreign portfolio investments (FPIs) and reduced speculation activities,” Cordros Capital Group stated.
