Naira Gains against the USD as CBN Begins FX Sales to BDC Operators…

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In line with our expectations, we saw the wide disparity between the I&E FXW and that of the BDC segment shrink as Naira appreciated against the USD at the Bureau De Change and the parallel (“black”) market respectively by 8.90% and
7.76% to close at N430.00/USD and N440.00/USD respectively.

However, NGN/USD exchange rate rose (i.e Naira depreciated) at the Investors and Exporters FX Window (I&E FXW) by
by 0.12% to close N386.13/ USD. 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 most of the foreign exchange forward contracts: 1 month, 2 months, 3 months and 6 months rates rose by 0.11%, 0.11%, 0.14% and 0.19% respectively to close at N386.91/USD, N387.79/USD, N388.76/USD and N391.75/USD respectively.

However, 12 months rate fell (i.e Naira depreciated) to close at N402.44/USD; while spot rate closed flat at N381.00/USD

In the new week, we expect further convergence of the exchange rates, especially between I&E FXW (the
autonomous window) and BDC segment, as BDCs continue operations.

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