Naira Appreciates Against the USD at the Investors & Exporters Window

In the just concluded week, Naira strengthened by 0.24% against the USD at the Investors & Exporters (I&E FXW) window to close at N410.00/USD even as the external reserves moderated by 0.27% to close at N35.12 billion as of Thursday, May 22, 2021. However, Naira depreciated at the Bureau De Change and Parallel “black” markets by 0.42% and 0.62% to close at N480.00/USD and N485.00/USD respectively.

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.

Elsewhere, the Naira/USD exchange rate fell (Naira appreciated) for most of the foreign exchange forward contracts: 2 months, 6 months and 12 months exchange rates fell by 0.09%, 0.01% and 0.13% to close at N416.32/USD, N428.59/USD and N447.69/USD respectively.

However, the 1 month and 3 months exchange rates rose by 0.21% and 0.04% to close at N413.70/USD and N419.70/USD respectively; while the spot rate closed flat at N379.00/USD.

In the new week, we expect Naira to weaken against the USD at most FX Windows as crude oil prices fall amid fresh concerns about another wave of the COVID-19 pandemic.