After reaching its historical low of N910 last weekend, a breathe of fresh calm return to the foreign exchange rate market following the announcement by Nigeria’s federal government with no rescinsion on its decision to redesign the Naira as a strategy to curb hoarding, round-tripping and consequently clip the wings of currency speculators who are fuelling rising demand for the dollar across all market segments.
Consequently, this prompted the Economic and Financial Crime Commission (EFCC) to beging clamping down on some currency traders (especially BDC Operators) and resultingly bringing losses to currency speculators who took no other options but to maintain bids between N720/USD and N800/USD during the week.
At the close of the week, the Naira edged the dollar by N135.25 (15.72%) week on week to N725/USD from N860.25/USD at the open parallel market and leaves the spread between the I&E and open markets at around N280 while the CBN still keeps blind eyes on the pressure experienced by the currency whose attendant effect is seen in the elevating commodity prices across board.
Furthermore, at the the Investors and
Exporters’ FX window the Naira lost N0.25 or
0.06% week on week to close the week at
N445.75/USD from N445.50/USD in the previous week’s close as we begin to approach festivities coupled with the announcement from the CBN on redesigning the local currency.
Thus, market participants maintained bids between N444/USD and N452/USD while at the open market, bids ranged between N710/USD and N734/USD.
At the Interbank Foreign Exchange Forward Contracts market, the spot exchange rate remained unchained from the previous week as it closed the week at N445/USD from last week.
Further afield, our analysis of the Naira/USD exchange rate in the Naira FX Forward Contracts Markets closed with rates trending higher across all tenor contracts.
Consequently, the contract prices closed the week at against the greenback at N451.06/USD, N453.64/USD, N460.71/USD, N476.91/USD and N503.46/USD across the the 1 month, 2 months, 3 months, 6 and 12 months in that order.
Elsewhere, the Bonny light crude price inched higher marginally by $0.08 (0.08%) w/w to close the week at USD96.21 per barrel from $96.13 per barrel in the previous week.
This is despite the rise in the global oil price on the back of eased covid restrictions in China.
In the coming week, we anticipate the calm to continue across all segment of the FX market barring any distortion in the market and coupled with the fact that traders will look to offset their dollar holdings at a discout following the recent announcement by the United States over illegal dollars in circulation.