Naira to Remain Stable Amidst Further Drop in Reserves

By Modupe Gbadeyanka

The Nigerian Naira is expected to stay stable in the exchange rate at the interbank window this week as the Central Bank of Nigeria (CBN) continues its weekly injections via the SMIS, analysts at Cowry Asset have said.

Last week, the Naira/Dollar rate depreciated at the interbank foreign exchange market to N361.34/$ despite weekly injections of $210 million by CBN 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.

Also, the local currency depreciated week-on-week (w-o-w) against the Dollar at the Investors & Exporters Forex Window (I&E FXW) by 0.07 percent to close at N363.92 amid continuous increase in demand for the greenback by foreign portfolio investors (FPIs). Elsewhere, the local currency remained unchanged against the US Dollar at both the Bureau De Change (BDC) segment and the parallel market at N358/$ and N361/$ respectively amid CBN’s sustained special intervention.

Also, analysts at Business Post forecast that the external reserves of the country will further reduce this week.

Last week, the amount in the reserves stood at $44.381 billion compared with the $44.826 billion a week earlier.