Naira/Dollar Exchange Rates Decline as Demand for Forex Rises

By Cowry Asset

In the just concluded week, the Naira/Dollar exchange rate steadied week-on-week at the interbank market (NIFEX) while the Naira appreciated at the I&E Foreign Exchange Window by N0.04 to N360.27/$ as at Thursday.

This was amid injections by the CBN worth $210 million into the foreign exchange market of which $100 million was allocated to Wholesale (SMIS), $55 million was allocated to Small and Medium Scale Enterprises and $55 million was sold for invisibles.

The local currency however depreciated at both the Bureau De Change and Parallel market segments by N0.28 each to close at N361/$ and N364/$ respectively on the back of increased forex demand.

Meanwhile, dated forward contracts at the interbank OTC segment depreciated despite increase in the foreign exchange reserves – external reserves increased week-on-week by 0.37% to $34.46 billion as at Wednesday, November 22, 2017.

The 1 month, 2 months, 3 months and 6 months contracts appreciated w-o-w by 0.07%, 0.16%, 0.23% and 0.57% to close at N365.52/$, N371.29/$, N377.60/$ and N399.26/$ respectively.

This week, we retain our stable outlook for the exchange rate amid sustained stability in global crude oil prices which should result in further build-up in foreign reserves as well as CBN‟s continued intervention in the various segments of the interbank foreign exchange market.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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