Despite efforts by the Central Bank of Nigeria (CBN) to stabilize the naira, the local currency depreciated further, with the official rate closing at N1,652.62 per US dollar.
The gap between the official and parallel market rates widened to N98, reflecting increased speculative activity and persistent demand for foreign exchange (FX).
Market Liquidity and FX Auctions
CBN injected approximately $55 million into authorized dealer banks last week, according to AIICO Capital Limited. However, FX sales to banks have slowed, as the central bank prepares to introduce an automated FX trading platform in December 2024.
Foreign Reserves and Borrowing Plans
Nigeria’s foreign reserves rose to $40.28 billion, an increase of $2.24 million week-on-week, supported by expectations of a $2.2 billion external borrowing plan. Over the past six weeks, reserves have grown at an average of $257.91 million per week.
Forward Market Trends
In the forwards market, naira depreciation continued across all contract durations:
- 1-month: Fell by 0.2% to N1,741.12 per USD.
- 3-month: Dropped 0.3% to N1,817.47 per USD.
- 6-month: Decreased by 0.2% to N1,927.93 per USD.
- 1-year: Declined by 3.7% to N2,158.28 per USD.
Commodities Market
Global oil prices climbed by 5% last week, driven by escalating tensions in Ukraine and expectations of higher Chinese imports. Brent crude reached $74.94 per barrel, while WTI traded at $70.98 per barrel.
Similarly, gold prices surged past the $2,700 mark, closing at $2,707.40 per ounce, fueled by safe-haven demand and reduced expectations for a U.S. interest rate cut.
