In the just concluded week, the local currency gained against the USD at the Bureau De Change (BDC) and parallel (‘black’) market segments by 0.55% and 0.27% to close N360/USD and N364/USD respectively. Also, the Naira further appreciated at the Investors & Exporters Forex Window (I&E FXW) by 0.01% to close at N364.50 amid increasing external reserves that rose by 0.14% to USD43.23 billion as at Thursday, December 27, 2018.
The local currency strengthened against the greenback at the Interbank Foreign Exchange market by 0.26% to close at N358.31/USD amid 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.
Meanwhile, the Naira/USD exchange rate rose (i.e. Naira depreciated) for most of the foreign exchange forward contracts – spot rate, 2 months, 3 months and 6 months rates fell by 0.02%, 0.05%, 0.20% and 0.12% respectively to close at 307.00/USD, 372.14/USD, 375.51/USD and 385.55/USD respectively; however, 1 months and 1 year FX rates fell (i.e. Naira appreciated) by 0.02% and 0.04% to close at N368.44/USD and 414.52/USD.
In the new week, we expect stability in the Naira/USD rate in most market segements, especially at the BDC Segment, as CBN sustains its special interventions.