Naira Appreciates as Forex Market Gets $8.287bn

By Adedapo Adesanya 

The week ended good on Friday, October 11, 2019 at the Investors and Exporters (I&E) segment of the foreign exchange market as the Naira appreciated against the US Dollar.

According to data sourced from the FMDQ, the local currency was 33 Kobo or 0.09 percent better than the American currency at the Investors segment of the market to trade at N362.13/$1 compared with N362.46/$1 recorded on Thursday.

This happened despite an increased demand of the greenback at the market segment, rising by 55 percent during the trading session to $191.67 million from the $123.29 million quoted at the previous session.

At the interbank segment of the Central Bank of Nigeria (CBN), the Naira/USD exchange rate remained flat at N306.95/$1 on Friday.

Business Post gathered from the half year activity report of the central bank that a total of $8.287 billion was injected into the interbank foreign exchange (forex) market in the first six months of 2019.

The bank said in the report that it purchased a total of $9.369 billion at the interbank segment, closing with a net purchase of $1.081 billion. This, according to the apex bank, has enable it manage demand pressure and ensure exchange rate stability at the market.

At the parallel market, the Naira/US Dollar closed flat at N360/$1 as it did in the previous trading day, but it was a different ball game for the local currency against the Pound Sterling as the Naira depreciated by N2 to close at N452/£1 in contrast to the previous day’s N450/£1.

This followed the meeting by the UK Prime Minister Boris Johnson and Irish Taoiseach Leo Varadkar who had a surprisingly fruitful Brexit discussions which prompted EU Chief Brexit Negotiator, Michel Barnier, to recommend that negotiations enter the final phase, ahead of the 17th’s EU summit scheduled for Thursday, October 17, 2019.

The local currency however saw no change against the Euro on Friday as the Naira closed at N390/€1 indicating a flat closing price quoted at the previous session.

The CBN report for HY 2019 showed that the forex market remained stable in the first half of 2019. This was attributed to the sustenance of policy measures adopted since June 2016.

These measures, according to the apex bank, include moral suasion, restriction of items from the official foreign exchange window, operations at the autonomous I&E window, and increased volume and frequency of foreign exchange sales to BDCs.