FX Market Update: NAFEM band under pressure as importers re-stock

The naira weakened 1.2% w/w at NAFEM to N1,612/USD on stronger Q3 import demand. CBN interventions slowed to ~20m last week from 10m the prior week.

Demand-supply mismatch widened at NAFEM as Q3 manufacturing inputs and PMS-related FX demand returned. Two-way quotes thinned mid-week. Parallel-market premium widened to 3.4% from 1.9% at the start of June.

We expect the CBN to step up open-market dollar sales if the premium breaches 5%, but a sustained rate-anchoring intervention is unlikely before the September MPC. Corporates should lock in 30-60 day FX cover for confirmed import lines.

Source: FMDQ / CBN