Heightened demand for the dollar sustained its pressure on the Naira following Nigerian banks’ resolve to ration FX spending limit for customers as well as the unavailabilty of new banknotes following the rollouts of the newly redesigned naira by the apex bank.
However, the new year was graced with currency scarcity across market segments as dollar scarcity come on renewed demand for the greenback by manufacturers, exporters and importers alike who are on the prowl for FX for business purpose.
At the investors and exporters’ FX window the
Naira slip for another week by N0.17 or 0.04%
week on week to close at N461.67/USD from
N461.50/USD in the previous week’s after the
rollout of banknotes by the CBN was graced by
limited supply from banks to Nigerians.
Also, the exchange rate fiasco between the Naira
and Dollar continued for another week at the
open parallel market window as the rate
tanked by 0.68% or N5 week on week to
N742/USD from N737/USD last week.
Thus, market participants maintained bids between N465/USD and N470/USD at the I&E segment while at the open market, bids ranged between N736/USD and N745/USD.
A look at activities 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.
Also, our analysis of the Naira/USD exchange rate in the Naira FX Forward Contracts Markets, there was a mixed trend across most tenor gauges for the Naira Forward Contracts against the greenback as we saw appreciation in the Naira Forward Index value across the 2 month, 3 month and 6 month tenors by 21bps, 5bps and 4bps week on week to close at contract offer prices of N475.11/USD,, N479.54/USD and N497.58/USD.
Contrary, the 1 month and 12 month forward contracts trended in a depreciating corner week on week by 0.49% and 0.21% to close at N470.35/USD and N530.67/USD respectively.
In the just concluded week, we saw the Bonny light crude price skid in the oil market by 4.1% or (USD3.35) week on week to close the week at USD78.93 per barrel (Jan.5) from USD82.28 per barrel as we saw the 2022 oil price rally begin to fizzle out and demand concerns shove oil benchmarks down.
Next week, we expect to incresaed demand for the greenback as well as the local banknotes as the deadline for deposition of old banknotes draws closer.
However, the jury is out to watch as we begin to see the multiplier effect of the policy across facets of the economy.
