The Nigerian local currency, Naira, swings negative at the Investors and Exporters Window as the nation’s external reserves shed US$204.40 million, according to Alpha Morgan Capital in a report, printed below the $35 billion mark.
The investment firm said Nigeria’s foreign exchange reserves decreased by US$204.40 million week on week to US$34.74 billion.
The decrease is attributed to outflows given the central bank (CBN’s) interventions across the various FX windows which outweighed dollar inflows.
Meanwhile, the naira lost 0.08% against the US$1 at the Investors and Exporters Window (IEW) to close at N410.33/USD while it gained against the dollar at the parallel market (0.42%) to close at N480.5/USD.
Oil market data this week showed Brent oil price rose 2.0% week on week to $68.12 per barrel despite lower demand caused by the Covid-19 crisis in India, Brazil, and Japan.
Afrinvest expressed the view that the Organisation of Petroleum Exporting Countries and allies (OPEC+) decision to gradually ease oil production cut from May to July continues to support the oil market amid the slower recovery in demand.
Currencies traders’ data indicates that the CBN spot rate traded flat at ₦379.00/$1.00 all week, in the last five years, the official exchange rate has been devalued more than 92%.
Analysts however noted that the activity level in IEW improved this week as total turnover jumped 39.1%, an equivalent of $106.4 million to $378.3 million.
At the FMDQ Securities Exchange FX futures contract market, the total value of open contracts settled at $4.7 billion, up 1.9% or $87.8 million from the prior week.
Afrinvest reported that the April 2022 instrument at a contract price of ₦436.18 had the most demand with an additional subscription of $69.0 million putting the total value at $209.0 million.
The firm added that the August 2021 instrument at a contract price of ₦424.72 had the least demand as the total value settled at $468.0 million.
“We expect Naira to trade within similar band across forex segments in the new week”, Afrinvest projected.