Naira/Dollar Rates Steady in Alternative Market Segments

By Cowry Asset

In the just concluded week, the Naira/Dollar exchange rate steadied week-on-week at the at both the Bureau De Change (BDC) and Parallel market segments at N361/$ and N364/$ respectively.

The local currency however depreciated week-to-date by 0.30 percent to N331/$ at the interbank market (NIFEX) on the back of increased foreign exchange demand; similarly the Naira lost at the I&E Foreign Exchange Window by N0.11 to N360.65/$ as at Thursday, November 30, 2017.

These were despite 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.

Meanwhile, dated forward contracts at the interbank OTC segment appreciated amid sustained increase in the foreign exchange reserves – available data showed external reserves increased Month-to-Date by 2.08 percent to $34.53 billion as at Friday, November 24, 2017.

The 1 month, 2 months, 3 months and 6 months contracts appreciated w-o-w by 0.12 percent, 0.21 percent, 0.33 percent and 0.50 percent to close at N364.75/$, N369.82/$, N375.26/$ and N394.41/$ respectively.

Next 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.