Naira Stabilizes against the Greenback as CBN Moves to Boost Liquidity…

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In the just concluded week, Naira appreciated against the USD at the Investors and Exporters FX Window (I&E FXW) by 0.09% to close at
385.67/USD.

However, NGN/USD closed flat at
N381/USD at the Interbank Foreign Exchange
market amid weekly injections of USD210 million by CBN into the forex market: USD100 million was allocated to Wholesale Secondary Market Intervention Sales (SMIS), USD55 million was allocated to Small and Medium Scale Enterprises
and USD55 million was sold for invisibles. Also,

NGN/USD exchange rate remain unchanged at
N472.00/USD and N477.00/USD respectively, at the Bureau De Change and the parallel (“black”) market respectively.

Elsewhere, the Naira/USD exchange rate appreciated further for most of the foreign exchange forward contracts: 1 month, 2 months, 3 months, 6 months and 12 months rates fell (i.e appreciated) by 0.15%, 0.22%, 0.32%, 0.58% and 0.99% respectively to close at N386.50/USD, N387.36/USD, N388.23/USD, N391.00/USD and N402.55/USD respectively.

However, spot rate closed flat at N381.00/USD.

In the new week, we expect the widened disparity between different exchange rates to shrink, especially between I&E FXW (the autonomous window) and BDC segment, as CBN resumes the sale of FX to BDC operators in the near future.

More so, given the renewed efforts by CBN to boost foreign currency supply and plug leakages, we expect to see Naira appreciate against the greenback in most market segments.

In the new week, we expect the widened disparity between different exchange rates to shrink, especially between I&E FXW (the autonomous window) and BDC segment, as CBN resumes the sale of FX to BDC operators in the near future.

More so, given the renewed efforts by CBN to boost foreign currency supply and plug leakages, we expect to see Naira appreciate against the greenback in most market segments.

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