Naira Gains 0.07% at I&E, Loses 0.28% at BDC Amid Worries

By Cowry Asset

In the just concluded week, Naira/Dollar rate moved in mixed directions across the foreign exchange market segments.

Specifically, the exchange rate closed flat at the interbank foreign exchange market and parallel (black) market at N356.92/$ and N361/$ respectively amid sustained weekly injections of $210 million by Central Bank of Nigeria (CBN) into the forex market via the Secondary Market Intervention Sales (SMIS).

During the injection, the apex bank allotted $100 million to the Wholesale SMIS segment, $55 million was allocated to Small and Medium Scale Enterprises sector and another $55 million was sold for invisibles.

During the week, there were reports that the apex bank had floated the local currency, but the CBN later denied this. However, this led to panic among foreign investors, who had to tread with caution so as not to get their fingers burnt.

In the week also, the Naira appreciated by 0.07 percent at the Investors and Exporters (I&E) window to N360.51/$, while it depreciated by 0.28 percent at the Bureau De Change (BDC) market to N359/$ despite weekly dollar supply by the apex bank to operators.

Meanwhile, the Naira/Dollar exchange rate fell (i.e. Naira gained) for most of the foreign exchange forward contracts – 1 month, 2 months, 3 months, 6 months and 12 months rates fell by 0.11 percent, 0.18 percent, 0.28 percent, 0.39 percent and 0.08 percent to close at N363.41/$, N366.48/$, N369.73/$, N380.45/$ and N404.76/$ respectively.

However, spot Naira/Dollar exchange rate rose by 0.02 percent to N307.00/$.