Naira Closes Flat At Investors And Exporters Window, Parallel Market

In the just concluded week, Naira remained unchanged against the US Dollar at the Investors & Exporters (I&E) and parallel (‘black’) markets to close at N410.00/USD and N485.00/USD respectively – despite the Central Bank of Nigeria (CBN)’s N5 to a dollar scheme.

Brandnewsday confirms that the Naira weakened against the greenback at the Bureau De Change (BDC) by 0.63% to close at N480.00/USD.

Meanwhile, NGN/USD exchange rate closed flat at N380.69/USD at the Interbank Foreign Exchange market amid weekly injections of USD210 million by CBN into the forex market: USD100 million was allocated to Wholesale Secondary Market Intervention Sales (SMIS), USD55 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for Invisibles.

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Also, despite the CBN’s ‘Naira 4 Dollar Scheme’ to boost the diaspora remittances and further strengthens the circulations of the US Dollar in the country, seems not to be effective.

Naira Closes Flat At Investors And Exporters Window, Parallel Market

Elsewhere, the Naira/USD exchange rate depreciated for most of the foreign exchange forward contracts: 1 month, 2 months and 3 months rates fell by 0.04%, 0.08% and 0.06% respectively to close at N412.09/USD, N415.05/USD and N417.87/USD respectively.

However, 6 months and 12 months rate rose by 0.18% and 0.07% to N426.18/USD and N442.45/USD while the spot rate remained flattish at N379.00/USD.

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The unchanged Naira/USD rate at the parallel market and the weakened position of the Naira against the greenback was in tandem with our expectation last week that the N5 to a dollar scheme by CBN may not have a significant impact on the exchange rate. Hence, in the new week, we expect Naira/USD to remain flat at most FX Windows.