Naira Opens Week Stronger Against US Dollar in FX Markets
The Nigerian naira commenced the week on a positive trajectory, appreciating against the United States dollar in the official foreign exchange market. According to data from the Nigerian Foreign Exchange Market (NAFEM), the currency closed at N1,356.19 per dollar on Monday, April 13, marking a gain of 70 kobo compared to the previous closing rate of N1,356.89 per dollar.
Strengthening Against Major Currencies
In addition to its performance against the dollar, the naira demonstrated strength against other major global currencies. It appreciated against the pound sterling by N3.67, closing at N1,825.15 per pound, up from N1,828.82 per pound recorded the previous Friday. Similarly, the currency improved against the euro by N4.89, settling at N1,587.69 per euro, compared to N1,592.58 per euro in the prior session.
At the GTBank foreign exchange desk, the naira appreciated by N3 to N1,373 per dollar from N1,376 per dollar, while it remained stable at N1,385 per dollar in the parallel market. This stability in the parallel market indicates a controlled environment amidst fluctuations.
Interbank Turnover and FX Inflows
Interbank turnover experienced a significant surge, rising to N114.887 million across 141 deals, up from N71.156 million recorded on Friday, as per data published on the Central Bank of Nigeria (CBN) website. However, foreign exchange inflows into the NAFEM window declined sharply to $571.80 million from $1.06 billion recorded in the previous week, according to a research report by Coronation Merchant Bank. This decline suggests relatively tighter foreign exchange supply conditions, which could impact future market dynamics.
Expert Insights on Naira Performance
Reacting to the naira's performance, Lukman Otunuga, Head of Market Research at FXTM Academy, commented that the relative stability of Nigeria's currency amid global volatility is commendable but has come at a significant cost. He noted that the naira currently ranks as the second-best performing African currency against the dollar year-to-date, trailing only the Zambian kwacha.
Otunuga disclosed that Nigeria's external reserves have declined for 16 consecutive days through April 8, dropping to $48.94 billion, the lowest level since mid-February. He explained that the Central Bank of Nigeria has maintained its commitment to defending the local currency, particularly in March, through various monetary policies and interventions.
Latest Exchange Rates and Predictions
The CBN has published the latest exchange rates for various currencies, including:
- CFA: N2.42
- Yuan (Renminbi): N198.53
- Danish Krona: N212.44
- Euro: N1,587.69
- Japanese Yen: N8.49
- Riyal: N361.34
- South African Rand: N82.07
- SDR: N1,858.11
- Swiss Franc: N1,721.05
- Pound Sterling: N1,825.15
- US Dollar: N1,356.19
- WAUA: N1,858.44
- UAE Dirham: N369.20
In a related development, Aliko Dangote, chairman of the Dangote Group, has predicted a strengthening of the Nigerian naira, suggesting that the currency could reach N1,100 to $1 this year. Dangote made these comments during the launch of the Nigeria Industrial Policy in Abuja, an event attended by Vice President Kashim Shettima and other key industry leaders.
The CBN continues to reiterate its commitment to stabilizing the naira and boosting dollar inflows, aiming to sustain this positive momentum in the foreign exchange markets.
