Naira to Sustain Stability Across Market Segments This Week

By Modupe Gbadeyanka

The relative stability enjoyed by the local currency at the various segments of the foreign exchange markets should be sustained this week.

This is the view of analysts at Cowry Asset, a Lagos-based investment research company, which is a leader in the industry.

Last week, the Naira remained stable at the various windows, closing mixed at the close of transactions on Friday.

“In the new week, we expect stability in the Naira/Dollar rate in most market segments, especially at the BDC Segment, as Central Bank of Nigeria (CBN) sustains its special interventions,” they opined in their weekly report.

At the Investors & Exporters (I&E) forex window, the Naira appreciated by 0.13 percent to close at N361.03 to a Dollar.

However, the local currency remained unchanged at N356.97/$ at the interbank segment amid weekly injections of $210 million by the apex bank.

This amount was supplied into the foreign exchange market via the Secondary Market Intervention Sales (SMIS).

During the injection, the central bank gave $100 million to Wholesale SMIS, $55 million was allocated to Small and Medium Scale Enterprises and another U$55 million was sold for invisibles.

Also, at the parallel (black) market and Bureau De Change (BDC) market segments, Naira remained stable against the Dollar to close at N360/$ and N357/$ respectively.

Meanwhile, the Naira/Dollar exchange rate fell further (i.e. Naira sustained gains) for most of the foreign exchange forward contracts – 1 month, 2 months, 3 months and 12 months rates moderated by 0.19 percent, 0.28 percent, 0.39 percent and 1.86 percent respectively to close at N363.39/$, N366.05/$, N369.04/$ and N404.99/$ respectively.

However, the Naira/Dollar exchange rate rose (i.e. Naira lost) at the spot market by 0.02 percent to close at N306.85/$.