Naira to Sustain Stability on Rising Crude Oil Price, Reserves

By Modupe Gbadeyanka

The Nigerian currency, Naira, is expected to sustain its stability at the foreign exchange (forex) market this week.

This, according to analysts at Cowry Asset, would be possible as global crude oil price retains its upbeat which should result in further build-up in country’s foreign reserves.

Last week, the Naira strengthened against the United States Dollar at the Investors & Exporters Forex Window (l&E FXW) by 0.25 percent to N361.41 per Dollar week-on-week amid the injections by the Central Bank of Nigeria (CBN) worth $210 million into the foreign exchange market of which $100 million was allocated to Wholesale (SMIS), $55 million was allocated to Small and Medium Scale Enterpriges and $55 million was sold for invisibles.

However, the Naira closed flat against the Dollar at both the parallel (black) market segment and the interbank foreign exchange market  segments at N353/$ and N331$ respectively while it depreciated at the Bureau De Change (BDC) by 0.28 percent to  N351/$ despite weekly inventions and increased external reserves.

Meanwhile, all dated forward contracts at the interbank over-the-counter (OTC) segment appreciated on sustained increase in the foreign exchange  reserves — spot rate, 1 month, 2 months, 3 months and 6 months contracts appreciated w-o-w by 0.05 percent,  0.39 percent, 0.49 percent, 0.58 percent and 0.77 percent to close at N305.80/$, N364.22/$, N368.40/$, N372.91/$, and N387.65/$ respectively.