By Dipo Olowookere
Last week, the local currency recorded a mixed performance at the different segments of the foreign exchange market (forex).
Specifically, the Nigerian Naira depreciated week-on-week (w-o-w) against the US Dollar at the Investors & Exporters Forex Window (I&E FXW) by 0.12 percent to close at N361.60.
However, the local currency appreciated against the US Dollar by 0.28 percent each at the Bureau De Change (BDC) segment and the parallel (black) market to close at N357/$ and N360/$ respectively on sustained special intervention by Central Bank of Nigeria (CBN).
But the Naira/Dollar rate closed flat at the interbank foreign exchange market at N330/$ amid a 0.44 percent w-o-w decrease in external reserves to $47.41 billion as at Thursday, July 19, 2018.
During the week, the CBN injected $210 million into the foreign exchange market via the Secondary Market Intervention Sales (SMIS).
A breakdown of the intervention showed that $100 million was allocated to Wholesale (SMIS), $55 million was allocated to Small and Medium Scale Enterprises and $55 million was sold for invisibles.
Meanwhile, according to Cowry Asset, all dated forward contracts at the interbank over-the-counter (OTC) segment depreciated – spot rate, 1 month, 2 months, 3 months and 6 months contracts lost 0.02 percent, 0.10 percent, 0.09 percent, 0.06 percent and 0.05 percent to close N305.85/$, N364.72/$, N367.93/$, N371.15/$ and N382.47/$ respectively.
“This week, we expect stability in the exchange rate at most market segments as CBN continues its weekly SMIS intervention coupled with the special intervention at the BDC segment to boost liquidity,” Cowry Asset said.
Modupe Gbadeyanka