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Naira Falls at Forex Market as External Reserves Drop to $41.6b

By Dipo Olowookere

The local currency depreciated against the Dollar during the week at the Investors & Exporters (I&E), Bureau De Change (BDC) and the parallel (black) segments of the foreign exchange (forex) market.

This was in line with expectations and the continuous decline in the nation’s external reserves, which closed at $41.6 billion at the end of the week.

Specifically, the Naira went down by 0.11 percent against the Greenback at the I&E window to finish at N364.01.

It also went down by 0.28 percent each at the BDC and black markets to settle at N360/$ and N364/$ respectively.

However, the Naira remained stable at N360.85/$ at the Interbank segments amid weekly injections of $210 million by the Central Bank of Nigeria (CBN) into the foreign exchange market via the Secondary Market Intervention Sales (SMIS).

In the intervention, $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, according to Cowry Asset, the Naira further depreciated for all dated foreign exchange forward contracts at the interbank over-the-counter (OTC) segment – spot, 1 month, 2 months, 3 months, 6 months and 1 year FX contracts lost 0.02 percent, 0.04 percent, 0.06 percent, 0.18 percent, 0.35 percent and 0.56 percent to close at N306.70/$, N366.93/$, N370.39/$, N374.35/$, N385.16/$ and N413.89/$ respectively.

“In the new week, we expect pressure on the Naira in most market segments; especially at the I&E FX Window amid falling foreign exchange reserves,” Cowry Asset said.

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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