Market News
Naira rebounds despite 15.2% drop in weekly FX inflows
The naira on Monday extended its rebound in the official foreign exchange market, despite a 15.2% decline in weekly foreign exchange inflows.
Data from the Central Bank of Nigeria (CBN) showed that the naira appreciated by 0.2%, with the dollar quoted at N1,451.81 on Monday, compared with N1,454.41 at the close of trading on Friday.
The gain followed a modest recovery recorded at the end of last week, when the local currency strengthened to N1,454.41 after eight consecutive days of depreciation triggered by mild demand pressure in the market.
In the parallel market, also known as the black market, the naira closed at N1,483 to the dollar, the same rate at which it ended trading on Tuesday of the previous week.
Meanwhile, foreign exchange inflows through the Nigerian Foreign Exchange Market declined to $716.3 million from $844.7 million in the preceding week, according to a report by the Coronation Merchant Bank Research Department.
The report showed that foreign portfolio investors accounted for the largest share of inflows at 32.98%, followed by exporters at 30.84%. The Central Bank of Nigeria contributed 17.36%, while non-bank corporates accounted for 16.94%. Other sources contributed 0.72%, while individuals made up 0.63% of total inflows.
Gross foreign reserves improved during the period, rising by 0.71% week on week to $45.43 billion, from $45.11 billion in the previous week, providing some support for the local currency.
Overall performance of the naira across the official and parallel markets was mixed last week, reflecting a mild weakness in the currency’s movement. The official exchange rate depreciated slightly by 0.28% week on week to close at N1,454.41 to the dollar, compared with N1,450.42 in the prior week. In contrast, the parallel market rate appreciated by 0.67% week on week to settle at N1,485.00 per dollar, from N1,495.00 previously.
As a result of these movements, the spread between the official and parallel market rates narrowed to N30.59 per dollar, from N44.57 per dollar recorded in the previous week, indicating a reduced gap between both markets.
