The naira rallied to a recovery at the weekend on the back of sustained increase in the country’s foreign exchange (forex) reserves.
The naira appreciated by 1.0 per cent to N1, 482.81 per dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
This came as the nation’s forex reserves rose by additional $73.05 million to $32.74 billion. It was the fifth consecutive accretion in the continuing buildup of the reserves.
Penultimate week, the reserves had added $195.01 million. It had grown by $89.76 million, $132.68 million and $10.76 million in recent weeks.
At the forwards market, naira contracts closed on the upside at the weekend with the one-year contract appreciating by 1.1 per cent to $1,504.10 per dollar. The three-month contract recovered by 1.4 per cent to N1,546.65 per dollar while the six-month contract appreciated by 0.6 per cent to N1,621.89 per dollar. However, the one-year contract slipped by 0.1 per cent to N1,769.62 per dollar.
Finance and economy experts were unanimous that the buildup in external reserves was a good indication for the country’s currency management and macroeconomic stability.
Analysts expected that changes in forex management rules, steady improvement in crude oil production and upbeat in global oil price could help the country mitigate its volatile forex situation.
