In the foreign exchange segment, the local currency was stable across markets. Some investment banking firms said the CBN intervention continues to be having positive impacts on foreign exchange (FX) market.
“In line with our expectation, we saw the foreign reserves rise further by US$15.2 million during the week to US$44.8 billion (24-04-2019) relative to US$44.7 billion in the previous week. As seen in the recent times, the increase in foreign portfolio buying interest in the fixed income market, and relatively stable oil output and prices have been largely responsible for the accretion to reserves”, Afrinvest said.
The Central Bank of Nigeria, CBN, continued with its weekly sales, as the apex bank injected US$210.0million into the market to support the local currency. The wholesale segment of the market was offered US$100.0 million, while the Small and Medium Enterprises (SMEs) segment received US$55.0million.
Similarly, customers requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allocated US$55.0million.
As a result of the continued inflows and CBN weekly forex injection, trading of the naira across markets remained largely stable.
For the parallel market and CBN spot rates, the Naira traded flat at N360.00/US$1.00 and N306.95/US$1.00 respectively. However, in the Investors and Exporters Window (I&E), the NAFEX rate depreciated 35kobo week on week (W-o-W) to N360.64/US$1.00 from N360.29/US$1.00 in the prior week.
According to Afrinvest, the total turnover in the investors and exporters (I&E) window was recorded at US$0.7 billion for the 3-day trading week ended the 26th of April; total turnover of US$1.9 billion in prior 4-day trading week ended the 18th of April, and US$1.0 billion in the 5-day trading week ended the 12th of April.
Total subscriptions in the FMDQ OTC futures market increased 7.7% W-o-W to US$8.4 billion from US$7.7 billion based on investor buying interest in the June 2019 instrument, which was up 42.4% to US$485.9 million from US$341.1 million the prior week.
“In our view, we expect the naira to remain stable at current bands in the near term especially as capital inflows remain upbeat and the CBN continues its weekly forex injection”, Afrinvest reassured.