Naira Lost Strength Against The Greenback At I&E FX Segment On Panic Buys…

0
159

In the just concluded week, the Naira traded in a relatively calm manner at the parallel market segment to close the week flat at N700/USD as panic buying continues.

It was a marginally negative close for the local currency at the Investors and Exporters window of the market as panic buying continues to take center stage despite the USD265 million FX inflow from the CBN’s vault majorly to airline operators in order to repatriate trapped revenues in Nigeria.

Thus, the naira depreciated by (0.27%) N1.17 week on week to N431.50/USD from N430.33/USD in the prior week as FX users and traders continue to experience shortages within the market and forcing traders to reserve their greenback holdings for a future date as the CBN continues ignoring traders while it maintains its intervention in the market.

Thus, most market participants maintained their bids between N417/USD and N437/USD.

At the Interbank Foreign Exchange market, NGN/USD closed flat at N430.00/USD amid CBN’s weekly injections of over USD200 million where USD100 million was allocated to Wholesale Secondary Market Intervention Sales (SMIS), USD50 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for Invisibles.

In the meantime, the Naira/USD exchange rate in the Naira FX Forward Contracts Markets inched higher across all tenors, safe for the 12 months contract which closed the week in the opposite direction at N477.74/USD from N478.51/USD.

However, the 1M, 2M, 3M and 6M tenors all rose by 1.26%, 1.19%, 0.93%, and 0.27% respectively to close the week’s offering at N434.44/USD, N437.68/USD, N440.19/USD, and N452.58..

Elsewhere, the Bonny light crude price depreciated by $7.95 (-7.6%) w/w to close the week at USD97.0 per barrel from USD104.95 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.