Naira Trades in the Mix Bag As Policy Directions from New Administration Drive Sentiments….

Date:

Following the policy statement by the new administration on plans to unify the exchange rate and also bring about a
moderation in the interest rates as part of efforts geared towards increasing investment and consumer purchasing power in
ways to sustain the economy at higher level, the demand level for the greenback eased marginally at the various FX segments.

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Consequently, the Naira traded in a bullish sentiment as it appreciated by N15 or 1.96% w/w to N752/$1 from N767/$1 at
the parallel market. Also, at the investors’ and exporters’ FX window, the Naira depreciated marginally against the United
States’ dollar by N0.16 or 0.03% w/w to close at N464.67/$1 from N464.51/$1 in the previous week as the hegemony of
the dollar continues while players in the market kept bids between N463 and N470.

At the Interbank Foreign Exchange Forward Contracts market, the spot exchange rate remained unchanged closed at N462/$1.

Also, in our analysis of the Naira/USD exchange rate at the weekly Naira FX Forward Contracts Markets, the dollar reigned with positive appreciations across all forward contracts against the Naira.

Consequently, the dollar strengthened by +2.49%, +4.31%, +5.25%, +5.89% and +5.02% w/w to close at N482.48/$1,
N499.57/$1, N511.30/$1, N536.48/$1 and N565.79/$1 at all tenor contracts respectively.

In the oil market this week, Oil prices were climbing on Friday following the recent United States’ debt ceiling Bill passed by the US Senates to bring to a vanish the risk of default and ahead the forthcoming OPEC+ meeting. The Brent Crude traded
at $76.81 per barrel on the back of positive US debt ceiling talks.

However, on the home front, the Bonny Light crude price lost its gains of last week by 7.61% or ($6.15) w/w, to close at $74.65 per barrel from $80.80 per barrel in the previous week.

Next week, we expect the naira to trade in a relatively calm band across various market segment barring any market distortion
and as the apex bank continues its weekly FX market intervention to defend the value of the naira.

Babatunde Akinsola
Babatunde Akinsolahttps://naija247news.com
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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