Naira appreciates to N1,403/$ in parallel market, gap with official rate narrows
By Aboki Forex —
The naira appreciated to N1,403 per dollar in the parallel market on Friday, from N1,407 on Thursday. In the Nigerian Foreign Exchange Market (NFEM), the currency depreciated to N1,337 per dollar.
Official rate and market gap
Data from the Central Bank of Nigeria (CBN) showed the indicative exchange rate for the naira weakened slightly to N1,337 per dollar from N1,336 on Thursday, representing a N1 depreciation. As a result, the gap between the parallel and official markets narrowed to N66 per dollar from N71 on Thursday.
Turnover and weekly moves
Interbank turnover at the NFEM declined by 31.8 per cent to $130.7 million on Friday, down from $191.7 million recorded on Thursday. On a weekly basis, the naira gained N12.99 against the dollar in the official market but weakened by N3 in the parallel market.
Analysts expect positive trend
Financial analysts expect the naira to maintain its positive trend next week. In their weekly financial market review and outlook, analysts at Cowry Asset Management Plc said the near-term outlook for the naira and external reserves remained broadly positive, supported by improved foreign exchange liquidity and continued reserve accumulation.
“We expect the near-term outlook for the naira and external reserves to remain broadly positive, supported by improved foreign exchange, FX, liquidity and continued reserve accumulation,” the analysts said.
They, however, identified weaker oil prices and persistent geopolitical uncertainty as key downside risks, given Nigeria’s reliance on crude oil earnings as a major source of foreign exchange inflows.