Naira Appreciates Against USD at I&E FX Window…

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In the just concluded week, Naira appreciated slightly against the USD at the Investors and Exporters FX Window (I&E FXW) by 0.06% to close at N389.25/USD.

However, amid wider disparity between the different exchange rates windows, NGN/USD exchange rate rose further (i.e Naira depreciated further) by 0.43% and
0.64% to close at N468.00/USD and N475.00/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 appreciated for most of the foreign exchange forward contracts: 1 month, 2 months, 3 months, 6 months and 12 months rates fell (i.e appreciated) by 0.23%, 0.35%, 0.43%, 0.35% and 1.46% respectively to close at N390.47/USD, N391.87/USD, N393.45/USD, N398.74/USD and N411.98/USD respectively.

However, spot rate closed flat at N381.00/USD.

We expect to see continued pressure on the local currency (the Naira/USD exchange rate) amid sustained dwindling external reserves.

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