Naira forwards signal calmer currency expectations
The gap between spot and forward rates has narrowed, easing one source of corporate uncertainty.
The spread between the naira's spot rate and its forward contracts has narrowed in recent weeks, a sign that the market expects less volatility over the coming year.
For companies with foreign-currency obligations, the forward curve is a practical planning tool. A flatter curve lowers the premium they must pay to hedge, which can encourage more firms to cover their exposure.
A fragile improvement
Dealers warned that the improvement is conditional on continued inflows and on the central bank's ability to meet demand at the official window. A single shock could widen the spread again quickly.
Up next
Tier-one banks post stronger capital ratios ahead of new thresholds
Higher retained earnings have lifted buffers, giving lenders room for loan growth.
More in Markets
See all
Naira Holds Near N1,370/$ as Reforms Steady the Foreign Exchange Market
The naira held broadly steady around N1,370 to the dollar as stronger reserves, tighter policy and returning portfolio inflows kept the currency within a narrow range.
NGX Turnover Hits N158.29bn as Investors Position for Q3 Earnings Season
Turnover on the Nigerian Exchange rose to N158.29 billion in the first full trading week of October as investors repositioned ahead of third-quarter earnings.
Fitch Revises Nigeria's Credit Outlook to Positive as Reserves Reach $54.9bn
Fitch Ratings has revised Nigeria's credit outlook to Positive from Stable, citing sustained reforms, disinflation and improved foreign reserves of $54.9 billion.
About the author
Adaeze Okonkwo
Markets Editor
Adaeze Okonkwo writes for BusinessPress.
