The naira depreciated as total FX inflow at the Nigerian foreign exchange market declined to $751.70 million amidst Central Bank (CBN) intervention. According to data from the CBN, the official exchange rate depreciated to N1536.43 per dollar on Monday from N1535.03 from the previous close.
The spot FX rate reached an intraday high of N1537, reflecting heightened demand for foreign currency at the official window. Recall that the Naira weakened against the US Dollar in the forex market last week, depreciating by 0.16% week on week to close at N1,535.04/US$1, after hitting an intraweek low of N1,536.73/US$1.
In the parallel market, the currency recorded a steeper decline, losing 0.65% week on week to settle at N1,550.00/US$1 in the absence of supportive FX supply versus rising demand. During the week, the Central Bank of Nigeria (CBN) offered a spot rate of 25.99% on OMO securities with 124 days to maturity, higher than investors had expected.
Analysts said the steep spot rate suggests CBN is seeking to attract and keep offshore inflows for longer to sustain FX liquidity. The authority also sold $50 million to banks to push the supply side amidst a decline in FX inflows.
Total FX inflows settled at US$751.70 million for the week, lower than the US$787.50 million recorded in the previous week. Exporters emerged as the leading contributors, accounting for US$216.10 million of total inflows, according to Coronation Merchant Bank research unit.
Non-bank corporates boosted to FX inflow with US$203.90 million, while foreign portfolio investors (FPIs) contributed US$175.60 million. The CBN made available US$137.4 million, while inflows from individuals and other sources accounted for 0.50% and 1.87%, respectively.