Naira Suffers 0.14% Loss at I&E on Rising FPI Outflows

By Cowry Asset

In the just concluded week, the local currency remained unchanged against the US Dollar at both the Bureau De Change (BDC) segment and the parallel (black) market at N358/$ and N361/$ respectively amid sustained special intervention by the Central Bank of Nigeria (CBN).

Also, Naira/Dollar rate closed flat at the interbank foreign exchange market at N330/$ amid weekly injections by CBN of $210 million into the foreign exchange market via the Secondary Market Intervention Sales (SMIS): 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.

However, the Nigerian Naira depreciated week-on-week (w-o-w) against the US Dollar at the Investors & Exporters Forex Window (I&E FXW) by 0.14 percent to close at N363.68 amid increasing demand for the greenback by foreign portfolio investors (FPIs).

Meanwhile, most dated forward contracts at the interbank over-the-counter (OTC) segment appreciated despite declining external reserves –1 month, 2 months, 3 months and 6 months contracts gained 0.10 percent, 0.20 percent, 0.19 percent and 0.58 percent to close N366.60/$, N370.04/$, N373.93/$, N386.27/$ respectively.

Next week, we expect stability in the exchange rate at the BDC segment as CBN continues its special intervention.