FOREX MARKET: Naira Firms against USD in All Market Segments amid Boost in FX Reserves…

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In the just concluded week, the local currency appreciated week-on-week in all foreign exchange market segments amid sustained intervention by CBN coupled with recent accretion to the foreign exchange reserves with proceeds of the recent USD3 billion Federal Government Eurobond issue which increased the country‟s public sector foreign assets to over USD38 billion. Specifically, the
Naira strengthened against the USD at the interbank market (NIFEX), the I&E FX
window, the Bureau De Change and Parallel market segments by at N361/USD and N364/USD respectively. These were amid injections by the CBN worth
USD210 million into the foreign exchange market of which USD 100 million was allocated to Wholesale (SMIS),
USD55 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for invisibles.
Meanwhile, dated forward contracts at the interbank OTC segment appreciated amid sustained increase in the
foreign exchange reserves – the 1 month, 2 months, 3 months and 6 months contracts appreciated w-o-w by
0.24%, 0.34%, 0.42% and 1.25% to close at N365.05/USD, N370.16/USD, N375.62/USD and N392.33/USD
respectively. This week, we retain our favourable outlook for the exchange rate amid sustained stability in
global crude oil prices which should result in further build-up in foreign reserves as well as CBN‟s continued
intervention in the various segments of the interbank foreign exchange market.

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