The naira weakened against the US dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, October 12, with the official exchange rate moving to N1,332.09/$1 from N1,331.19/$1 recorded on Friday. Data from the trading session showed that the local currency lost 90 kobo, representing a 0.07% depreciation against the dollar.
Naira's Performance Against Pound and Euro
Beyond the dollar, the naira also depreciated against the pound sterling, closing at N1,762.63/£1 compared with N1,759.16/£1 in the previous session, a decline of N3.47. However, the currency strengthened against the euro, appreciating by N1.64 to close at N1,489.15/€1 from N1,490.79/€1 recorded on Friday.
At the GTBank foreign exchange desk, the naira gained N2 against the dollar to close at N1,338/$1, compared with N1,340/$1 previously. The currency traded flat at the parallel market at N1,360/$1 during the session.
This mixed performance comes despite reports that Nigeria's net foreign reserves had risen to $46 billion, a figure that analysts suggest could bolster the Central Bank of Nigeria's (CBN) capacity to intervene in the market when necessary.
FX Turnover Drops Sharply
Data published by the Central Bank of Nigeria showed that interbank foreign exchange turnover fell by 77.7% to $36.242 million from $162.736 million recorded in the preceding session. Despite this decline, the reported rise in net foreign reserves to $46 billion, driven by increasing private capital inflows, is seen as a positive signal for the market.
The reserves could provide additional support for the foreign exchange market as importers prepare for increased demand ahead of the December festive season. Last week, dollar transactions climbed to $3.37 billion from $1.70 billion a week earlier, with spot transactions accounting for almost all the increase.
Analysts Give Outlook for Naira
In its weekly economic and market report for the week ended October 9, Cordros Securities stated that the near-term outlook for foreign exchange inflows would depend on the resilience of foreign portfolio participation and a recovery in domestic sources of dollar supply. The outlook suggests that sustained foreign investment inflows and improved dollar supply will remain important factors in determining the naira's performance in the coming weeks.
CBN Exchange Rates for Other Currencies
The CBN's published exchange rates for Monday, October 12, showed the following selling rates: CFA at N2.27, Yuan/Renminbi at N199.03, Danish krona at N199.19, Euro at N1,489.15, Yen at N8.40, Riyal at N354.67, South African rand at N80.58, Special Drawing Rights (SDR) at N1,802.73, Swiss franc at N1,598.58, Pound sterling at N1,762.63, US dollar at N1,332.10, West African Unit of Account (WAUA) at N1,800.76, and UAE dirham at N362.65.
Earlier, Legit.ng reported that the International Monetary Fund (IMF) has acknowledged that Nigerians are suffering from the rising cost of living, urging the federal government to introduce targeted cash transfers and temporary income support for vulnerable households. The Fund said the measures would help reduce poverty and improve food security as rising food and energy prices continue to put pressure on household budgets.
