Naira scarcity and the level of cash crunch in the economy continue biting Nigerians harder as the deadline for the use of the old currency as a legal tender elapses on Friday; though, the extension for the return of old banknotes continues while the supreme court and the council of states, after it meetings has ordered the apex bank to keep in circulation, the old banknotes, in a bid to ease the hassles faced by Nigerians.
In the just concluded week at the investors’ and exporters’ FX window, the Naira traded in a quiet manner to close at N461.50/USD just as was in the previous week despite the growing FX pressure on the naira and the newly redesigned currency circulation battle.
On the other hand, the Naira lost strength against the dollar at the parallel market as the naira value depreciated by 0.7% or N5 week on week to N755/USD from N750/USD last week.
Thus, market players maintained bids between N460/USD and N465/USD at the I&E segment while in the open market, bids ranged between N750/USD and N757/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, in our analysis of the Naira/USD exchange rate in the Naira FX Forward Contracts Markets, it was a mixed trend across all forward contracts as the 1-Month and 12-Month tenors depreciated by 1.11% and 8.66% to close at N488.77/USD and N529.62/USD.
On the contrary, the 2-Month, 3-Month and 6- Month tenor contracts appreciated against the greenback by 1.16%, 0.6% and 0.34% week on week to close at contract offer prices of N481.72/USD, N486.65/USD and N504.45/USD respectively.
In the oil market this week, Oil price oscillation was nonstop as it traded at above $8 6 per barrel as OPEC+ remained unfazed by Russia’s surprising output cut of 500,000 barrels daily for March, which the cartel said does not change the course of its production targets.
On the home front, we saw the Bonny light crude price reacted to factors playing in the oil market as it rose by 9.05% or (USD7.43) week on week to close at USD89.55 per barrel from USD82.12 per barrel.
In our opinion, the Naira demand pressure is expected to stay unabating following the limited supply of the local currency.
This further exposes the inability of the central bank to meet supply of the local currency as we transcend gradually into the cashless policy regime.