Naira Declines To N1,551/$1 Amid Rising Demand

The value of the naira started the week on a depreciating note, sliding slightly to N1,551 and to the dollar at the close of trading on Monday, according to data by the Central Bank of Nigeria (CBN).

Last Friday, the value of the naira had closed at N1,548 to the dollar. Last week, the value of the naira had depreciated by 0.3 per cent to NGN1,547.58 to the dollar at the Nigerian Foreign Exchange Market (NFEM) despite the intervention from the CBN.

The CBN had sold around $300.90 million to authorised dealers in the course of last week as the value of the naira in the forwards market increased across board. The 1-month had appreciated by 0.2 per cent to N1,589.78 while the 3-month appreciated by 0.6 per cent toN1,654.40. Also, the 6-month contract was up by 1.4 per cent to N1,751.59 and the 1-year contract was up 3.0 per cent to N1,935.72.

Analysts at Cordros research note that while naira yields have remained attractive, “the existing geopolitical risks, which have now been compounded by the expectation of rising global trade protectionism, have continued to constrain capital flows, limiting FPI inflows to the foreign exchange market.

“With rising demand and still limited inflows, the naira is likely to face pressure in the near term, causing a gradual naira depreciation despite CBN interventions.”