Naira Depreciates Further Against USD at Most FX Windows…

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In line with our expectations, Naira deprecaited further against the USD at the Investors and Exporters FX Window (I&E FXW) by 0.52% to close at N388.50/USD.

Also, NGN/USD exchange rate rose (i.e Naira depreciated) by 0.43% and 1.08% to close at N462.00/USD and N470.00/USD respectively, at the Bureau De Change and the parallel (“black”) markets.

However, NGN/USD closed flat at N381/USD at the Interbank Foreign Exchange market amid weekly injections of USD210 million by CBN into the forex 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 depreciated for all of the foreign exchange forward contracts, save the 6 months rate which fell (i.e appreciated) by 0.08% to close at N397.91/USD (from N398.22/USD).

However, spot rate for 1 month, 2 months, 3 months and 12 months rates rose (i.e depreciated) by 0.38%, 0.36%, 0.33% and 0.10% respectively to close at N390.10/USD, N391.78/USD, N393.51/USD and N413.53/USD respectively.

We expect to see sustained pressure on the local currency (the Naira/USD exchange rate) amid sustained haemorrhage of the foreign exchange reserves – against the backdrop of weakened crude oil export earnings as well as foreign portfolio inflows.

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