By Modupe Gbadeyanka
The Nigerian Naira is anticipated to gain against the American Dollar this week on the back of renewed interest by foreign portfolio investors in local financial assets, analysts at Cowry Asset have said.
Also, analysts at Business Post say the local currency is expected to appreciate against the Dollar across the foreign exchange segments in the country as a result of rise in the prices of crude oil on the global market this week.
Last week, Yemen’s Iran-allied Houthi rebels claimed responsibility for the blowing up of Aramco oil facilities in eastern Saudi Arabia with a drone.
This is anticipated to cut down 5.7 million barrels per day (bpd) of total Saudi oil output, over five percent of global crude supply, a deficit which will take weeks to remedy and is likely to drive up international oil prices.
Business Post reports that as at the time of filing this report, the Brent was trading above $65 per barrel, above the $60 benchmark Nigeria set for its 2019 fiscal year.
With the price projected to hit $70 to $80 before the damage is rectified, Nigeria would earn more, which would bolster the local currency across the segments.
Last week, the domestic currency appreciated against the Dollar at most forex segments.
At the Investors and Exporters (I&E) and the Bureau De Change (BDCs) market windows, the Naira improved by 0.01 percent and 0.28 percent respectively to close at N362.04/$ and N357.00/$ respectively.
Similarly, the Naira gained against the US Dollar to close at N358.02/$ at the interbank segment amid weekly injections of $210 million by Central Bank of Nigeria (CBN) into the FX market via the Secondary Market Intervention Sales (SMIS).
At the supply, $100 million was allocated to Wholesale SMIS, $55 million was allocated to Small and Medium Scale Enterprises and another $55 million was sold for invisibles.
However, at the parallel (black) market, the local currency remained unchanged against the Dollar at N360.00/$.
Meanwhile, the Naira/Dollar exchange rate fell (i.e. Naira appreciated) for most of the foreign exchange forward contracts – 1 month, 2 months, 3 months, 6 months and 12 months rates fell by 0.06 percent, 0.09 percent, 0.10 percent, 0.37 percent and 0.09 percent to close at N365.33/$, N368.70/$, N372.24/$, N383.02/$ and N411.55/$ respectively. But spot rate was flat at N306.90/$.
