Naira Under Pressure Amid Selloffs by Foreign Portfolio Investors

August 18, 2018
naira depreciate

By Dipo Olowookere

The Naira came under pressure this week as selloffs by foreign portfolio investors created a huge demand of foreign exchange at the market during the week.

At the close of business on Friday, the local currency lost 0.14 percent week-on-week against the Dollar at the investors and exporters (I&E) forex window.

However, the Nigerian legal tender remained unchanged against the US Dollar at the Bureau De Change segment and the parallel market to close at N357/$ and N360/$ respectively as CBN sustained its special intervention.

Also, the Naira/Dollar rate closed flat at the interbank foreign exchange market at N330/$ amid weekly injections by CBN of $210 million into the foreign exchange 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, analysts at Cowry Asset said.

Meanwhile, all dated forward contracts at the interbank over-the-counter (OTC) segment depreciated – spot rate, 1 month, 2 months 3 months and 6 months contracts lost 0.03 percent, 0.20 percent, 0.22 percent, 0.20 percent and 0.47 percent to close N306.10/$, N365.46/$, N368.52/$, N371.69/$ and N383.64/$ respectively.

Cowry Asset is predicting that next week, it expects slight depreciation at the I&E FXW segments amid expected sell-offs by foreign portfolio investors.

Dipo Olowookere

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 [email protected]

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