At the end of trading week, Naira weakened
against the USD at the Bureau De Change and the parallel (“black”) market by 3.49% and 3.41% to close at N445.00/USD and N455.00/USD respectively despite the resumption of FX sales to the BDC segment – indicative of unmet backlogs of demand for the greenback.
However, NGN/USD exchange rate appreciated at the Investors and Exporters FX Window (I&E FXW) by 0.03% to close at N386.00/ 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 appreciated for most of the foreign exchange forward contracts: 1 month, 2 months, 3 months, 6 months and 12 months rates moderated by 0.04%, 0.07%, 0.12%, 0.19% and 0.54% respectively to close at N386.74/USD, N387.51/USD, N388.30/USD, N391.02/USD and N400.38/USD respectively; while spot rate closed flat at N381.00/USD.
In the new week, we expect Naira to depreciate against the USD, especially at the I&E FXW (the autonomous window) given the recent delining crude oil prices.
Meanwhile, FG’s directive to the CBN to ban access to FX for food and fertilizer importers could conserve the external reserves, but increase demand pressure at the Parrellel and BDC markets