The official exchange rate for the naira appreciated by 0.2%, reaching NGN1,536.00/USD, as foreign exchange sales by offshore players, driven by expectations of an upcoming OMO auction, offset the absence of intervention from the Central Bank of Nigeria (CBN).
This slight appreciation came despite negative factors affecting market sentiment, including the imposition of a 14.0% tariff by the US on Nigerian exports and an increase in oil supply by OPEC+, which led to a dip in global oil prices.
Meanwhile, Nigeria’s gross FX reserves continued their downward trend, declining by USD135.57 million week-on-week to USD38.17 billion as of April 2. This marks the third consecutive week of reserves depletion.
In the forwards market, the naira saw decreases across various contracts, with 1-month rates falling by 2.8% to NGN1,619.49/USD, 3-month rates declining by 3.4% to NGN1,689.27/USD, 6-month rates dropping by 2.9% to NGN1,772.91/USD, and 1-year rates slipping by 2.1% to NGN1,930.55/USD. These movements indicate the continued pressures facing the naira in the longer-term currency outlook.
