CBN Records Highest Dollar Sale in One Week As Naira Falls to New Exchange Rate
- The Naira's exchange rate value dropped against the US dollar in the first trading session following the Easter holidays
- Data shows that the CBN recorded one of its highest dollar sales in a week in the official exchange market
- Despite pressure on the Naira, Nigeria's foreign reserves remain above the global benchmark of $40 billion
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Central Bank of Nigeria (CBN) recorded its highest weekly dollar sale on Tuesday, April 22, amid a fresh decline in the value of the naira.
Data from the CBN revealed that the naira weakened by 0.2% at the Nigerian Foreign Exchange Market (NAFEM), with the exchange rate closing at N1,602.63/$ compared to N1,599.93/$ recorded last Thursday before the Easter holiday.
Source: UGC
While in the black market, also known as the parallel market, the naira closed flat, steadying at N1,610 per dollar, according to data collated from street traders and online platforms.
Forex inflows in NFEM
According to a report by Coronation Merchant Bank Research, the Nigerian Autonomous Foreign Exchange Market (NAFEM) saw a significant increase in inflows, reaching $1.42 billion compared to $847 million the previous week.
The Central Bank of Nigeria (CBN) accounted for 50.60% of the total inflow, with Foreign Portfolio Investors (FPIs) contributing 8.61%, non-bank corporates 25.14%, exporters 12.99%, and other sources making up 2.66%.
BusinessDay reported that the naira strengthened by 0.24% against the US dollar in the official spot market last week, closing at N1,599.93/$.
Meanwhile, forward contracts showed rates settling as follows: the one-month forward at N1,642.03/$, the three-month at N1,720.49/$, the six-month at N1,802.37/$, and the one-year forward at N1,979.27/$.
Source: Getty Images
CBN forex inflow data for January 2025
Meanwhile, in its latest economic report for January, the CBN revealed that there was a sharp drop in inflows through the apex bank, falling to $2.33 billion from $4.09 billion in December.
In contrast, autonomous inflows rose to $7.31 billion, up from $6.08 billion the previous month, signalling increased activity among FX market participants outside the CBN.
On the outflow side, CBN-related outflows declined to $3.80 billion from $4.16 billion, while autonomous outflows saw a modest increase to $1.04 billion from $1.01 billion in December.
These shifts resulted in a net outflow of $1.47 billion through the CBN in January, significantly higher than the marginal $0.07 billion net outflow recorded in December.
While net inflows from autonomous sources rose to $6.26 billion from $5.07 billion, underscoring the growing influence of private players in the FX market.
JP Morgan gives reasons for naira's fall
Ealier, Legit.ng reported that Global financial services firm JP Morgan has weighed in on notable naira depreciation against the US dollar.
The naira plunged to a four-month low, exchanging above the N1,600 mark in the official and unofficial forex markets.
In a note to clients about Nigeria, JP Morgan said that although the naira has depreciated, the fall is reasonable compared to other frontier and emerging market currencies.
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Source: Legit.ng
