Naira/USD Moves Mixed in Forex Market Segments…

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In the just concluded week, NGN/USD rate moved in mixed directions across the foreign exchange market segments.

Specifically, the NGN/USD exchange rate closed flat at the Interbank Foreign Exchange market and parallel (“black”) market at N356..92/USD and N361/USD respectively amid sustained weekly injections of USD210 million by CBN into the foreign exchange market via the Secondary Market Intervention Sales (SMIS), of which: USD100 million was allocated to Wholesale SMIS, USD55 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for invisibles The exchange rate fell (i.e. Naira appreciated) at the Investors and Exporters FX Window by 0.07% to N360.51/USD.

However, the Naira depreciated at the Bureau De Change market by 0.28% to N359/USD despite weekly dollar supply by the apex bank to operators.

Meanwhile, the Naira/USD exchange rate fell (i.e. Naira gained) for most of the foreign exchange forward contracts – 1 month, 2 months, 3 months, 6 months and 12 months rates fell by 0.11%, 0.18%, 0.28%, 0.39% and 0.08% to close at N363.41/USD, N366.48/USD, N369.73/USD, N380.45/USD and N404.76/USD respectively.

However, spot Naira/USD exchange rate rose by 0.02% to N307.00/USD. In the new week, we expect appreciation of the Naira against the USD across the market segements as CBN sustains its special interventions against the backdrop of rising external reserves.

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