The Naira traded in the mixed bag across fx segments against the dollar as demand pressure resurfaced amidst lower fx supply
to meet the unabating demand across the parallel market.
At the close of the week, the naira appreciated by 4.89% at the official market to close at N740.38/$1 and depreciated by 33bps to N918/$1 at the parallel market. This upturn at the official market was driven by factors such as improved foreign exchange supply from the CBN via the Investors and Exporters (I&E)
window, slower demand for the dollar at the official market, leading to increased pressure at the parallel market and
speculation about potential CBN-led Naira devaluation.
Elsewhere at the FMDQ Securities Exchange (SE) FX Futures Contract Market, the local currency was downbeat against the US dollar across contract tenors.
Notably, forward rates depreciated marginally by 0.13%, 0.22%, 0.30%, 0.55% and 1.12% respectively for the 1-month, 2-month, 3-month, 6-month and 12-month contract tenors, to close at N791.85/$1, N801.94/$1,
N812.06/$1, N842.73/$1 and N907.97/$1 as a result of sustained demand pressures across various tenors.
In the oil market this week, WTI crude oil hit a 2023 high at $85 per barrel on Friday due to shrinking inventories, briefly
surpassing this mark before settling at $84.90. The last time it reached such levels was in November 2022. Simultaneously,
Brent crude oil set a 2023 record at $87.88 per barrel, up $1.05. Falling U.S. inventories, down 10.6 million barrels are a major
driver of this price surge.
To this, the Brent Crude was up $88.31 per barrel on Friday and was followed by the WTI which
traded at $85.34 per barrel. Elsewhere, the price of the Nigerian Bonny Light crude oil closed positive on Friday at $91.80
from last week’s $88 per barrel despite the likelihood for Saudi Arabia and Russia to deepen production cuts.
In the coming week, Cowry Research anticipate the naira to trade in the positive band to show further appreciation at the
various fx markets barring any distortions while the apex bank maintains its interventions to shore up the naira value.