Friday, October 22, 2021

    Naira Weakens Against Greenback at I&E Window, BDC and Parallel Markets…

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    Naija247news Editorial Team
    Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

    In the just concluded week, Naira shed weight against the USD at the Investors and Exporters window, Bureau De Change market and the parallel (‘black’) market by 1.32%, 1.50% and 1.06% to close at N410.00/USD, N474.00/USD and N478.00/USD respectively.

    However, NGN/USD exchange rate closed flat
    at N380.69/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.

    Meanwhile, despite the sustained rise in brent crude oil prices, the external reserves fell w-o-w by 0.92% to USD35.47 billion as at Thursday, February 18, 2021.

    Hence, the Naira/USD exchange rate weakened for all of the foreign exchange forward contracts: 1 month, 2 months, 3 months, 6 months and 12 months rates rose by 1.50%, 1.59%, 1.42% and 0.96% and 0.27% respectively to close at N413.96/USD, N418.21/USD, N421.12/USD, N429.29/USD and N443.14/USD. Meanwhile, the spot rate remained flattish at N379.00/USD.

    In the new week, in spite CBN’s attempt to re-engage foreign portfolio investors by higher interest rates, we expect Naira/USD to depreciate further at the I&E FX Window given the pressure on the external reserves and with forward fx rates being priced higher.

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