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Naira Falls against Dollar Despite CBN $195m Intervention

By Cowry Asset

Last week, the Naira lost ground against the US Dollar at the Investors & Exporters Forex Window (I&E FXW), week-on-week, by 1.38 percent to N367.16/$.

However, the local currency appreciated at Bureau De Change (BDC) market segment by 0.55 percent to N363/$.

Elsewhere, the Interbank and Parallel market segment remained unchanged at N325/$ and N368/$. This was amid injections by the CBN worth $195 million into the foreign exchange market of which $100 million was allocated to Wholesale (SMIS), $50 million was allocated to Small and Medium Scale Enterprises and $45 million was sold for invisibles.

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Meanwhile, the weekly movements in most dated forward contracts at the interbank OTC segment suggested future depreciation of the Naira/$ exchange rate despite a slight increase in the foreign exchange reserves – external reserves increased week-to-date by 0.16 percent to $30.27 billion as at

Thursday, June 29, 2017.

The 1 month, 3 month, 6 months and 12 months contracts depreciated w-o-w by 0.05 percent, 0.07 percent, 0.09% and 20.85 percent to close at N310.49/$, N321.16/$, N339.39/$ and N373.18/$ respectively.

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Also, the spot rate depreciated by 0.02 percent to N305.90/$ despite $7.5 million in intervention sales by CBN to banks.

In the current week, we expect stability at the alternative market segments, although subject to CBN’s level of intervention.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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