Naira Further Depreciates against the USD at the BDC, Parallel Markets…

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In the just concluded week, Naira weakened
further against the USD at the Bureau De Change and the parallel (“black”) market by 2.70% and 2.20% to close at N457.00/USD and N465.00/USD respectively; further widening the gap between market segments and contrary to the objective of CBN to harmonise all FX rates.

However, NGN/USD exchange rate at the
Investors and Exporters FX Window (I&E FXW) closed flat at N386.00/ USD.

Also, 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, 6 months and 12 months rates rose by 0.01%, 0.02%, 0.04%, 0.09% and 0.34% respectively to close at N386.78/USD, N387.60/USD, N388.47/USD, N391.39/USD and N401.76/USD respectively; while spot rate closed flat at N381.00/USD.

In the new week, we expect Naira to stabilize against the USD, especially at the Bureau De Change market, amid CBN’s increasing capacity to intervene; hence, the positive impact could trickle down to the parallel (“black”) window.

The external reserves moved northward in the month of September – rising by 0.42% to USD35.81 billion as at September 17, 2020 down from USD35.66 billion.

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