Naira Appreciates Against Dollar Amid $210m Injection

By Modupe Gbadeyanka

The local currency appreciated against the Dollar at the close of the trading last week amid weekly injections of $210 million by Central Bank of Nigeria (CBN) into the foreign exchange (forex) market via the Secondary Market Intervention Sales (SMIS).

During the week, the apex bank allocated $100 million to Wholesale SMIS, while $55 million was shared to Small and Medium Scale Enterprises, with another $55 million sold for invisibles to cater for medical fees, school fees and allowances.

At the close of the week, the Naira went up by 0.04 percent against the Dollar at the Investors & Exporters Forex Window (I&E FXW) to quote at N363.60.

Also, the local currency appreciated by 0.17 percent against the Greenback at the interbank forex market to settle at N360.85/$.

In line with expectations, the Naira remained unchanged at the Bureau De Change (BDC) segment to close N360/$ as CBN continued its weekly intervention.

However, at the parallel (black) market, the Naira depreciated by 0.27 percent to close at N363/$. Meanwhile, the Naira depreciated for most dated foreign exchange forward contracts at the interbank over-the-counter (OTC) segment; spot, 1-month, 2-month and 3-month lost 0.02 percent, 0.04 percent, 0.07 percent and 0.07 percent to close at N306.65/$, N366.79/$, N370.16/$ and N373.69/$ respectively.

However, Naira appreciated for 6-month and 1-year FX contracts by 0.11 percent and 0.32 percent to close N383.83/$ and N411.59/$ respectively.

“In the new week, we expect exchange rate stability in most market segments; howbeit, some pressure at the I&E FX Window amid falling foreign exchange reserves,” analysts at Cowry Asset said.