" /> Resurgent naira boosts investor confidence | Hallmarknews
Published On: Mon, Jul 17th, 2017

Resurgent naira boosts investor confidence

FELIX OLOYEDE |

Renewed investor confidence in the Nigerian foreign exchange market and the Central Bank of Nigeria’s (CBN) continued interventions have eased pressure on the naira as the country’s currency appreciated by 3.43 percent on the Nigerian Autonomous Foreign Exchange Market (NAFEX) to N362.80 on Friday from N375.70 when the window was launched on April 21, 2017.

Over $3.83 billion has been exchanged at the NAFEX over the last three months, while CBN intervention in the forex market has injected over $7.8 billion since aggressive intermediation in February 2017. Before CBN intervention the naira had slumped to N525 to a dollar in the parallel market. But Pound and Euro held up at N472 and N420 respectively at alternate FX market on Friday.

Traders note that there has been a steady convergence between the different segments of the market over the last three months, especially between the NAFEX and the parallel market. The currency was stable at the parallel market appreciating by N1 to $/N367 compared with $/N368 it exchanged for between Tuesday and Thursday last week.  The British Pound and Euro also traded at £/N397.67 and €/N350.35 respectively as the naira dipped 0.44 percent and 0.32 percent against both currencies respectively at the close of business on Friday.

“Confidence is gradually returning to the foreign exchange market,” says Dr Vincent Nwani, Director, Research and Advocacy, Lagos Chamber of Commerce and Industry (LCCI). According to him, “the stock exchange year-to-date return is about 23 percent. Last year it was about -6 percent, which shows that foreign investors who had long left the market are straggling back.”

He asserts that with the market becoming more liquid, investors who had money outside the country are beginning to bring them back. “Liquidity of foreign currency has returned, though there are concerns that if oil prices go down again or the Niger-Delta militants strike, the forex problem may return,” said Nwani.

The intervention of the CBN in the forex market has helped ease pressure on the naira and the creation of NAFEX has also assisted in improving investor confidence in the system, said Moses Ojo, analyst at Panafrican Capital Plc.

“It seems investors are comfortable with the new window and we have seen a lot of participation in the I&E window,” he observes. According to him, “from an average weekly transaction of between $3 million and $40 million, these days we see transactions up to $400 million in that segment of the market.”

Analysts believe the naira may continue to strengthen against other currencies if crude oil prices continue to appreciate and the apex bank sustains the injection of forex into the market. Crude oil export which accounts for over 90 percent of Nigeria’s foreign exchange needs has been stable since the turn of 2017. Brent price was up 1.1 percent to $48.96 per barrel on Friday, while Light crude also appreciated 1.2 percent to $46.64.

Mr Andrew Esene, Research analyst, Futureview explained that there are now more suppliers of forex than buyers in the NAFEX window, which has helped reduce the pressure on the naira.

The influx of liquidity in the country’s foreign exchange market enables the apex bank to clear the backlog of unmet demands and manufacturers could just walk into their banks and put in Letters of Credits (LCs) and have funded without hassles.

The introduction of the NAFEX Window has boosted foreign investors’ confidence that they could easily exit any time they want to, Victor Ukapai, analyst with Focus Bank based in Lagos noted. He added that the platform allows sellers of forex to match up with buyers without any intermediary.

Over $380 billion foreign inflow has come into Nigeria since January, which was a result of the decision of the apex bank to allow market forces determine the value to the naira.

“The Purchasing Manager Index (PMI) also whichrose to 52.9 in June of 2017 from 52.5 in May, shows there is more forex liquidity in the country,” he enunciated.

Reactions from Facebook

comments and opinions

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Recent posts

  • The Rape of Skye Bank:

    FELIX OLOYEDE| Skye Bank has never been lucky, right from its inception in 2005, the financial institution has been serially plundered by its key management figures. Until recently, however, the bank had plodded along impressively keeping its nose as clean as whistle. But with a new and younger board that took over from the sagely […]

  • Call for restructuring unstoppable – OneVOICE

      By EMEKA EJERE  | Despite the rejection of devolution of power to the federating states by the National Assembly, members of Nigerian civil society under the aegis of ‘OneVOICE’ have insisted that the campaign for step by step restructuring of Nigeria must continue. It believes that certain items on Exclusive Legislative List of the […]

  • Broad Street Watch: What really is Nigeria doing right?

      Teslim Shittay-Bey  | It is almost cliché that Nigeria is the sick man of Africa. All things dark and ugly have gradually found a nestling home in Africa’s largest black nation.  Ranging from bloody insurgency, human trafficking, nepotism, ethnic irredentism to grand larceny and political misconduct, Nigeria has been punched into a squared corner […]

  • Quest for Food Sufficiency: ‘Nigeria operates below 50 tractors per 1,000 km2, a far cry from the African standard.

    FELIX OLOYEDE  | Nigeria’s drive to attain food sufficiency may take a longer time if frantic efforts are not made to reverse the current trends of very low mechanized agriculture in the country. The country is way off below global standard in terms of the number of tractors per land area that farmers own, having […]

  • Business Feasibility: Table water production

    DANIEL ZUBAIR  | Nigeria’s bottled water industry has grown phenomenally over the past decade, with volume sales growing at an annual rate of 31% between 2002 and now. The market accommodates both multinationals, large local corporate and thousands of SMEs across the country. Bottled water is expected to comfortably surpass carbonates as the most widely […]

  • Nigeria is having problem because the centre is too strong – Coach Onigbinde

      Chief Adegboye Onigbinde  is a former coach of the Nigerian national football team, the Golden Eagles. Onigbinde has been involved in sports administration in the country at different levels over the past four decades. He is still a member of FIFA’s Technical Committee. Recently he was found in a gathering of politicians from various […]

  • Anambra 2017: Obiano, Nwoye, Uba, Chidoka lead the pack as 32 aspirants justle for guber tickets 

      A total of 32 governorship aspirants, 12 of whom are in the country’s ruling party, the All Progressive Congress (APC), seven from the Peoples Democratic Party (PDP), four each from the All Progressives Grand Alliance (APGA) and United Progressive Party (UPP), are presently justling for tickets of the various political parties ahead of the […]

  • Those resisting restructuring are asking for dismemberment of Nigeria — Nosa Igiebor  

      Restructuring and fiscal federalism are touchy issues for different Nigerians for a wide variety of reasons ranging from the blatantly ethnic to the brazenly self-serving and economic. However some Nigerians see within the call for restructuring and fiscal decentralization a mechanism for growing the Nigerian economy in a manner that would ensure sustained growth […]

  • Enjoy Your Summer with FirstBank Dollar Denominated Cards

      This summer promises to be an exciting one for holiday makers with FirstBank’s bouquet of Dollar denominated cards.  Convenience, security, flexibility and improved spend are the key defining features of these Dollar cards. To delight customers, wherever they travel this summer, FirstBank offers three Dollar card products namely – Visa Gold, Visa Dollar Prepaid, […]

  • My love is for Journalism, but branding is my passion, says Wale Adebiyi, MD, Parvenu Media Services

    Parvenu Media Services is an Ibadan-based SME that is making waves in the personal and corporate branding business in Nigeria. The man behind this fast-growing venture, Wale Adebiyi, a journalist turned branding specialist has been running the business for about a decade. In this interview with FELIX OLOYEDE, he narrates how Parvenu Media Services has […]

  • Do you think that Festac Town can reclaim its glory days?

    Festac Town has lost its glory and many part of the once clean and enviable community is no longer fit for human habitation.  Do you think that Festac Town can reclaim its glory days? Reactions from Facebook comments and opinions

  • First Bank Dopemu bubbles with customers

    ENIOLA ILORI| At a time of crippling recession some industries have proven to be fairly resilient. The banking sector despite the loud and undisguised anger of economic agents in other sectors of the economy has shown its ability to defy earnings gravity by pulling up corporate profits against the odds. Indeed despite the harsh financial […]

  • CAKE BAKING

    DANIEL ZUBAIR| The cake making business is a very lucrative and profitable venture. A lot of people like and appreciate cake. This makes it an easy product to sell. Cake is one of the most consumed snacks and meal by people in Nigeria and all over the world. Reasons Why You should Start Cake Making […]

  • Visa expands global transaction processing with facilities in Singapore, UK

    EMEKA EJERE|   Global payments technology company, Visa has announced expanded transaction processing capabilities in two state-of-the-art data centres in Singapore and the United Kingdom. According to the company, the new global processing hubs will increase the speed, resilience and geo-diversity of infrastructure, while strengthening the company’s ability to deliver new and more sophisticated ways […]

  • Wapic Insurance intensifies growth drive

    EMEKA EJERE| Innovative moves by Wapic Insurance Plc to pat down the adverse effects of recession on its top line earnings has seen the insurer raise its half year (H1) 2017 premium by 31.47 per cent year-on-year. The aggressive drive for new businesses and written premiums helped drive its profit higher, with the company posting […]

  • Stakeholders seek immediate upgrade of maritime infrastructure

    By FUNSHO OLOJO Stakeholders in the maritime sector have recommended urgent upgrade of the industry’s infrastructure to make it more productive. They spoke separately during the 2017 African Day of Seas and Oceans in Lagos. The Managing Director, Nigerian Waterways Authority, Mr. Boss Mustapha, in his presentation drew attention to the condition of Nigerian roads, […]


Visit us on Google+