Naira to Appreciate on Sustained Weekly Inflow of Forex

By Modupe Gbadeyanka

Analysts at Cowry Asset have predicted a good week for the local currency at the foreign exchanage (forex) market this week.

In their weekly report, they said the Naira will experience an appreciation on the back of the anticipated injections by the Central Bank of Nigeria (CBN).

“In the new week, we expect appreciation of the Naira against the Dollar across the market segments as CBN sustains its special interventions against the backdrop of rising external reserves,” they said in the report released last Friday.

Last week, the Naira/Dollar exchange rate remained unchanged at most foreign exchange market segments.

Specifically, the NGN/USD exchange rate was flattish at the Interbank forex market at N357.53/$ amid sustained weekly injections of $210 million by the CBN into the market via the Secondary Market Intervention Sales (SMIS), 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.

Similarly, the Naira closed flat against the US dollar at the parallel (black) market and the Bureau De Change market at N361/$ and N359/$ respectively.

However, the exchange rate rose (i.e. Naira depreciated) at the Investors and Exporters FX Window by 0.02 percent to N360.82/$.

Meanwhile, the Naira/Dollar exchange rate rose (i.e. Naira lost) for all of the foreign exchange forward contracts – spot, 1 month, 2 months, 3 months, 6 months and 12 months rates rose by 0.02 percent, 0.03 percent, 0.02 percent, 0.01 percent, 0.11 percent and 0.70 percent to close at N306.95/$, N363.56/$, N366.58/$, N369.88/$, N381.03/$ and N403.68/$ respectively.