Naira Gains 0.28% at Black Market amid 0.38% Drop in Foreign Reserves in One Week

By Cowry Asset

Last week, the Nigerian Naira appreciated week-on-week (w-o-w) against the US Dollar at the parallel (black) market and the Bureau De Change segments by 0.28% each to close N362/$ and N360/$ respectively on increased dollar supply to the BDCs.

At the Investors & Exporters Forex Window (I&E FXW), the local currency went up by 0.02% to close N360.91 amid 0.38% week to date decrease in external reserves to $47.42 billion as at Thursday, June 7, 2018.

However, the Naira/Dollar rate remained unchanged at the interbank foreign exchange market at N330/$ amid weekly injections by Central Bank of Nigeria (CBN) of $210 million into the foreign exchange market; of which $100 million was allocated to Wholesale (SMIS), $55 million was allocated to Small and Medium Scale Enterprises and $55 million was sold for invisibles.

Meanwhile, most dated forward contracts at the interbank over-the-counter (OTC) segment appreciated – spot rate, 2 months, 3 months and 6 months contracts gained 0.02%, 0.08%, 0.25% and 1.01% to close N305.95/$, N367.77/$, N371.17/$ and N382.58/$ respectively; however, 1 month contracts lost 0.02% to close N305.95/$.

This week, we expect stability in the exchange rate at most market segments as CBN continues its intervention coupled with increased dollar liquidity at the BDC segment.