The value of the naira closed last week stronger than it began as it appreciated by 1.1 per cent at the official rate to sell at N1,531 to the dollar on the back of interventions by the Central Bank of Nigeria (CBN) at the foreign exchange market.
At the parallel market, the currency also firmed as it closed at N1,660 to the dollar as against N1,665 at which it opened the week’s trading activities. The CBN in the course of the week had sold $114.85 million to authorised dealers in the course of the week.
In the forwards market, the value of the naira declined across board as the 1-month contracts closed at N1,591.41 showing a -0.1 depreciation. Also, the 3-month contract was down by -0.8 per cent to N1,667.93 to the dollar, while the 6-month and the 1-year contracts were down by -1.6 and -1.4 percents to N1,779.33 and N1,962.32 per dollar respectively.
Following the CBN interventions, the 30-days moving average of the external reserves had declined by 0.75 per cent or $303.95 million week on week to $39.99 billion as at January 23, 2025 compared to $40.29 billion which it was as at January 17, 2025.
Commenting on the naira, analysts at Cordros Research noted that, in the short term, foreign exchange demand pressure is expected to remain intact. “We believe sustained CBN intervention and increased transparency and market efficiency from the adoption of the Electronic Foreign Exchange Matching System (EFEMS) will support naira stability.”
The CBN is expected to, on Tuesday this week, launch the Nigeria Foreign Exchange Code which is a set of rules guiding the foreign exchange market and its players.
The CBN governor, Olayemi Cardoso had also announced that the apex bank will be setting up a compliance department before the end of next month.
According to him, the compliance department will address past challenges, align the Nigerian foreign exchange department with global standards, and build a more transparent and resilient financial sector that can drive Nigeria’s economic growth and development.
