Nigeria’s foreign exchange (FX) reserves have decreased by USD1.03 million week-on-week (w/w), bringing the total to USD36.30 billion as of September 4, 2024. This marks the fifth consecutive week of depletion, raising concerns over the nation’s economic outlook.
Despite the drop in reserves, the naira remained relatively stable, appreciating by 0.3% w/w against the US dollar to NGN1,593.32/USD at the Nigerian Autonomous Foreign Exchange Market (NAFEM). This resilience comes even as NAFEM turnover fell by 24.5% week-to-date (WTD), with a total turnover of USD764.61 billion as of September 5. Trades were executed within a wide range of NGN1,400.00/USD to NGN1,650.00/USD, reflecting ongoing volatility.
In the forwards market, the naira faced depreciation pressures, with the 1-month (-2.3% to NGN1,660.59/USD), 3-month (-3.7% to NGN1,733.99/USD), 6-month (-5.0% to NGN1,843.32/USD), and 1-year (-8.2% to NGN2,074.04/USD) contracts all recording declines.
Experts predict that FX pressures will continue as supply remains tight. Without meaningful intervention from the Central Bank of Nigeria (CBN), the naira is expected to face further depreciation in the near term.
