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Naira Sheds 0.11% at I&E Despite CBN’s $210m Intervention

By Dipo Olowookere

Transactions at the foreign exchange (forex) market in Nigeria closed mixed amid further drop in the external reserves.

At the Investors & Exporters Forex Window (I&E FXW), the Naira declined by 0.11 percent to close at N362.67 per Dollar amid a 0.42 percent week-on-week decrease in external reserves to $47.1 billion as at Friday, August 2, 2018.

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However, the local currency remained unchanged against the US Dollar at the Bureau De Change segment and the parallel market to close at N357/$ and N360/$ respectively as the Central Bank of Nigeria (CBN) sustained its special intervention.

Also, according to analysts at Cowry Asset, the Naira/Dollar rate closed flat at the interbank foreign exchange market at N330/$ amid weekly injections by the apex bank of $210 million into the foreign exchange market via the Secondary Market Intervention Sales (SMIS).

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A breakdown of the injection showed that $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 depreciated; spot rate, 1 month, 2 months contracts lost 0.02 percent, 0.04 percent and 0.04 percent to close N305.95/$, N365.57/$ and N368.96/$; however, 3 months and 6 months contracts gained 0.09 percent and 0.24 percent to close N371.99/$ and N384.18/$ respectively.

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Next week, “we expect stability at the alternative forex market segments amid sustained CBN interventions therein,” Cowry Asset said.

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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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