Naira Appreciates Against Dollar as External Reserves Hit $43b

By Dipo Olowookere

The local currency appreciated this week against the United States Dollar the various segments of the foreign exchange market.

At the Bureau De Change (BDC) and parallel market segments, the Naira was strengthened by 0.55 percent and 0.27 percent to close N360/$ and N364/$ respectively.

Also, the local currency further appreciated at the Investors & Exporters forex window by 0.01 percent to close at N364.50/$.

The positive performance put up by the local currency across the market segments this week came amid increasing external reserves that rose by 0.14 percent to settle at $43.23 billion as at Thursday, December 27, 2018.

At the interbank window this week, the local currency strengthened against the greenback by 0.26 percent to close at N358.31/$.

This came on the back of the weekly injections of $210 million into the foreign exchange market by the Central Bank of Nigeria (CBN) via the Secondary Market Intervention Sales (SMIS).

During this intervention on Thursday, the apex bank allotted the sum of $100 million to the wholesale SMIS, $55 million to Small and Medium Scale Enterprises and $55 million for invisibles.

Meanwhile, the Naira/USD exchange rate rose (i.e. Naira depreciated) for most of the foreign exchange forward contracts – spot rate, 2 months, 3 months and 6 months rates fell by 0.02 percent, 0.05 percent, 0.20 percent and 0.12 percent respectively to close at 307.00/$, 372.14/$, 375.51/$ and 385.55/$ respectively. However, 1 month and 1 year FX rates fell (i.e. Naira appreciated) by 0.02 percent and 0.04 percent to close at N368.44/$ and 414.52/$.