Naira slips 90 kobo to N1,332/$1 as interbank dollar turnover falls 77.7%

The naira weakened by 90 kobo against the US dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, October 12, closing at N1,332.09/$1 from N1,331.19/$1 on Friday. That is a 0.07% depreciation for the session.

The local currency also lost ground against the pound sterling but gained on the euro, while interbank foreign exchange turnover crashed 77.7% to $36.242 million from $162.736 million in the preceding session.

Pound up, euro down

The naira closed at N1,762.63/£1 against the pound, compared with N1,759.16/£1 in the previous session, a decline of N3.47. Against the euro, it appreciated by N1.64 to settle at N1,489.15/€1, up from N1,490.79/€1 on Friday.

At the GTBank foreign exchange desk, the naira gained N2 against the dollar to close at N1,338/$1, from N1,340/$1 previously. On the parallel market, the currency traded flat at N1,360/$1.

Turnover drops, reserves rise

Data from the Central Bank of Nigeria (CBN) showed interbank foreign exchange turnover fell to $36.242 million from $162.736 million. Even so, Nigeria's net foreign reserves have reportedly risen to $46 billion amid increasing private capital inflows, a position that strengthens the CBN's capacity to intervene in the market when necessary.

The reserves could offer extra support for the foreign exchange market as importers prepare for higher 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 of the increase.

Cordros Securities, in its weekly economic and market report for the week ended October 9, said 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.

That outlook means sustained foreign investment inflows and improved dollar supply will stay central to how the naira performs in the coming weeks.

CBN selling rates

The CBN's published exchange rates for Monday, October 12 showed the following selling rates: CFA N2.27, Yuan/Renminbi N199.03, Danish krona N199.19, Euro N1,489.15, Yen N8.40, Riyal N354.67, South African rand N80.58, Special Drawing Rights N1,802.73, Swiss franc N1,598.58, Pound sterling N1,762.63, US dollar N1,332.10, West African Unit of Account N1,800.76 and UAE dirham N362.65.

For Nigerian businesses and consumers, the mixed movement across currencies keeps import billing costs tilted upward against the dollar and pound, even as euro-denominated trade gains a little relief.