Naira Strengthens Against US Dollar at I&E FX Window…

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In the just concluded week, Naira appreciated further against the USD at the Investors and Exporters FX Window (I&E FXW) by 0.83% to close at N386.00/USD.

However, NGN/USD exchange rate rose further (i.e Naira depreciated
further) by 0.43% to close at N470.00/USD, at the Bureau De Change market which further widened disparity between the different exchange rates windows.

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.

Also, Naira closed flat against the USD at the parallel (“black”) market at N475.00/USD.

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 0.79%, 0.81%, 0.88%, 1.10% and 0.95% respectively to close at N387.38/USD, N388.69/USD, N389.99/USD, N394.35/USD and N408.08/USD respectively.

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

Rising global crude oil prices appear to be having a positive correlation with recent stability in the I&E FXW, a development we expect to be sustained in the current week in spite of sustained erosion in the foreign exchange reserves. Rising global prices also reflect improving demand, suggestive of rising global confidence.

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