In the opening trading session of May at the Nigerian Autonomous Foreign Exchange Market (NAFEM) window, the Nigerian Naira experienced a slight decline, settling at N1,402.67 to the US dollar. This marks a decrease of 0.83% from the previous close of N1,390.96 in April, according to market data from the Financial Markets Dealers Quotations (FMDQ).
Throughout the trading day, the Naira witnessed fluctuations, reaching a peak of N1,445 and a low of N1,299.42 against the dollar. This significant spread of N145.58 reflects the volatility observed in the forex market.
Meanwhile, the volume of dollar transactions saw a modest rise of 3.32%, totaling $232.84 million, up from $225.36 million on the preceding Tuesday.
In contrast, the parallel market saw the Naira weakening further, dropping to N1,380 per dollar on May 2nd, marking a 1.45% fall from the N1,360 rate on April 30th. This decrease brought the disparity between the parallel market and NAFEM rates down to a mere N22.67 from the N40.96 observed earlier.
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On a positive note, the Stanbic IBTC Nigeria Purchasing Managers Index (PMI) reported a slight uptick to 51.1 in April, up from 51.0 in March. This improvement is attributed to the fortification of the Naira, which eased inflationary pressures and boosted business activity in Nigeria to a three-month high in April 2024.
Further insights from the trading session include:
- The Naira experienced volatility within the Investors’ and Exporters’ (I&E) window, hitting a high of N1,445 and a low of N1,299.42 against the dollar.
- Against the British pound, the Naira depreciated by 2.86%, concluding the day at an exchange rate of N1,750, down from the previous day’s N1,700.
- Against the euro, the Naira weakened by 3.33%, settling at N1,500 compared to N1,450 in the prior session.
- Forex market activities experienced a marginal uptick, with the transaction volume rising by 3.32% to reach $232.84 million, exceeding the previous amount of $225.36 million.
- The Central Bank of Nigeria (CBN) reported a slight growth in reserves by 0.318%, with the total reserves increasing to $32.255 billion on April 30th from $32.233 billion on April 29th, continuing an upward trajectory for six consecutive days.
The Stanbic IBTC Nigeria PMI highlighted that the appreciation of the Naira in April has contributed to a moderation in inflationary pressures. The report emphasized the ongoing impact of exchange rate fluctuations on business conditions, noting a gradual increase in prices witnessed in approximately twelve months.
Source: NairaMetrics