Naira Drops Across Market Segments

By Cowry Asset

In the just concluded week, the Central Bank of Nigeria (CBN) injected $195 million into the interbank foreign exchange market.

In the wholesale segment of the market of the interbank market, CBN auctioned $100 million, $50 million went to the Small and Medium Enterprises (SMEs) and the Invisibles segment received $45 million.

Despite the inflows, the Naira depreciated week-on-week (w-o-w) at the Interbank and Bureau De

Change market segments by 3.13% and 0.27% to N330/USD and N367/USD respectively.

However, the Naira strengthened at the Investors & Exporters Forex Window (I&E FXW) by N0.42 to N359.56/USD.

At the parallel market, the local currency remained stable w-o-w. Dated forward contracts at the interbank OTC segment suggested likely appreciation of the Naira amid relatively high foreign exchange reserves – external reserves stood at USD31.55 billion as at Friday, August 18, 2017.

The spot and 3 months forward contracts depreciated w-o-w by 0.03% and 0.23% to N305.80/USD N378.44/USD respectively.

The 6 months and 12 months however appreciated w-o-w by 0.03% and 0.01% to N398.52/USD and

N435.63/USD.

This week, we expect CBN’s continued intervention in the interbank segment, increasing investor confidence and consistent build-up in external reserves to lead to further stability of the Naira/USD exchange rate.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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