Naira up against US dollar as external reserve rises

In the just concluded week, the local currency gained against the USD at the Bureau De Change (BDC) and parallel (‘black’) market segments by 0.55% and 0.27% to close N360/USD and N364/USD respectively.

Also, the Naira further appreciated at the Investors & Exporters Forex Window (I&E FXW) by 0.01% to close at N364.50 amid increasing external reserves that rose by 0.14% to USD43.23 billion as at Thursday, December 27, 2018.

The local currency strengthened against the greenback at the Interbank Foreign Exchange market by 0.26% to close at N358.31/USD amid weekly injections of USD210 million by CBN into the foreign exchange market via the Secondary Market Intervention Sales (SMIS) of which: USD100 million was allocated to Wholesale SMIS, USD55 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for invisibles.

Meanwhile, the Naira/USD exchange rate rose (i.e. Naira depreciated) for most of the foreign exchange forward contracts – spot rate, 2 months, 3 months and 6 months rates fell by 0.02%, 0.05%, 0.20% and 0.12% respectively to close at 307.00/USD, 372.14/USD, 375.51/USD and 385.55/USD respectively; however, 1 months and 1 year FX rates fell (i.e. Naira appreciated) by 0.02% and 0.04% to close at N368.44/USD and 414.52/USD.

In the new week, we expect stability in the Naira/USD rate in most market segements, especially at the BDC Segment, as CBN sustains its special interventions.

SOURCE: OperaNews