Naira Lost Strength Against The Greenback At All Market Segments On Supply Shortage…

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Nigeria’s FX crisis continues to worsen,
hampering economic activities and brewing
bleak outlook for the currency as FX users
continue to experience shortages within the
market and forcing traders to reserve their
greenback holdings for a future date as the
CBN continue ignoring traders while it
maintains its bi-weekly intervention in the
market.

To this, the Naira plunged further by (-
2.04% w/w) N14 to N700/USD from N686/USD
at the parallel market as the misery continues for the Naira against the greenback due to supply shortage.

In the same vein, at the I&E Window, there was a depreciation by (-0.3% w/w) N1.28 to close the week at N430.33 from N429.05/USD in the previous week.

Thus, most market participants maintained bids between N417/USD and N444/USD.

At the Interbank Foreign Exchange market, NGN/USD closed flat at N430.00/USD amid CBN’s weekly injections of USD210 million where 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.

In the meantime, the Naira/USD exchange rate traded in an appreciative mood as the Naira FX Forward Contracts gained strength across all tenors by 0.12% and 0.34%, 0.31%, 0.32% and 0.55% respectively to close the week’s offering at N429.02/USD, N432.52/USD, N436.15/USD, N451.35/USD and N478.51/USD.

Elsewhere, the Bonny light crude price appreciated by $3.38 (+3.33%) w/w to close the week at USD104.95 per barrel from USD101.57 per barrel in the previous week.

Next week, we expect the Naira to trade in a relatively calm manner band across all segments barring any significant market distortions as the CBN continues its weekly FX market interventions.