Naira Appreciates Against USD at the I&E FX Window…

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In the just concluded week, Naira appreciated against the USD at the Investors and Exporters FX Window (I&E FXW) by 0.81% to close at N383.00/USD.

However, Naira depreciated against the USD at the Bureau De Change and the
parallel (“black”) markets by 5.68% and 8.17% respectively to close at N428.00/USD and N450.00/USD respectively.

NGN/USD closed flat at the Interbank Foreign Exchange market, at N358.51/USD amid weekly injections of USD210 million by CBN into the foreign exchange market:
USD100 million was allocated to Wholesale
Secondary Market Intervention Sales (SMIS), USD55 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for invisibles. Elsewhere, the Naira/USD exchange rate fell (i.e Naira appreciated) for most of the foreign exchange forward contracts: 1 month, 2 months, 3 months, 6 months and 12 months rates fell 1.05%, 1.32%, 1.59%, 2.22% and 3.92% respectively to close at N385.34/USD, N387.60/USD, N390.00/USD, N398.39/USD and N419.23/USD respectively. However, spot rate remained flattish at N361.00/USD.

In the new week, we expect depreciation of the Naira against the USD, especially at the I&E FX Window amid low crude oil prices and falling external reserves.

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