In the just concluded week, Naira weakened
against the USD at the Investors & Exporters Window as well as the Bureau De Change and Parallel markets by 0.12%, 0.40% and 0.40% respectively to close at N411.75/USD, N500/USD and N505.00/USD respectively.
We saw the FX reserves decline w-o-w by 0.33% to close at USD33.12 billion as at July 9, 2021, despite the sustained increase in crude prices.
Meanwhile, 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.
Elsewhere, the Naira/USD exchange rate appreciated for most of the foreign exchange forward contracts: 2 months, 3 months, 6 months and 12 months exchange rates fell by 0.15%, 0.11%, 0.09% and 0.05% to close at N415.54/USD, N417.65/USD, N423.69/USD and N435.54/USD respectively.
However, 1 month rate depreciated by 0.02% to N413.52/USD while the spot rate remained at N379.00/USD.
In the new week, we expect Naira to weaken against the greenback at most FX Windows as CBN’s capacity to defend the Naira weakens amid plunging external reserves.