Naira Depreciates Against USD at I&E FXW, Interbank FX Market…

In the just concluded week, NGN/USD rate rose (i.e. Naira depreciated) at most foreign exchange market segments. Specifically, the NGN/USD exchange rate rose at the Investors and Exporters FX Window (I&E FXW) by 0.19% to N361.46/USD.

Similarly, the Naira lost against the US dollar at the Interbank Foreign Exchange market by 0.05% to N357.70/USD despite the sustained weekly injections of USD210 million by CBN into the foreign exchange market via the Secondary Market Intervention Sales (SMIS), of which: USD100 million was allocated to Wholesale SMIS, USD55 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for invisibles.

However, the exchange rate was flattish at the parallel (“black”) market and the Bureau De Change market at N360/USD and N358/USD respectively.

Meanwhile, the Naira/USD exchange rate rose for most of the foreign exchange forward contracts – 1 month, 2 months, 3 months, 6 months and 12 months rates rose by 0.19%, 0.21%, 0.23%, 0.27% and 0.39% to close at N363.99/USD, N366.69/USD, N369.56/USD, N379.55/USD and N403.28/USD respectively.

However, spot rate fell (i.e. Naira gained) by 0.02% to close at N306.95/USD, In the new week, we expect appreciation of the Naira against the USD across the market segements as CBN sustains its special interventions against the backdrop of rising external reserves.