FX Market: Naira Depreciates Against Dollar at IEW
The local currency, Naira, depreciated against the United States dollar (USD) at Investors and Exporters Window (IEW) this week.
Naira depreciated against the USD at the Investors and Exporters FX Window by 0.19% to close at ₦386.50/USD.
Cowry Asset noted the local currency plunged as external reserves declined week-on-week by 0.36% to USD$36.32 billion on Thursday, June 19, 2020.
Also, naira – dollar exchange rate rose – that is, depreciated – by 1.14% and 1.11% to close at ₦445.00/USD and ₦455.00/USD respectively at the Bureau De Change and the parallel markets.
However, spot rate closed flat at the Interbank Foreign Exchange market, at ₦358.51/USD, amid weekly injections of USD210 million by the Central Bank of Nigeria (CBN).
The apex bank as part of its weekly FX intervention the foreign exchange market allocated USD100 million to Wholesale Secondary Market Intervention Sales (SMIS).
Also, CBN allocated USD55 million to Small and Medium Scale Enterprises and USD55 million was sold for invisibles.
Elsewhere, the local currency exchange rate fell – that is, Naira appreciated – for most of the foreign exchange forward contracts.
Forward contracts for 2 months, 3 months, 6 months and 12 months rates decreased by 0.12%, 0.27%, 0.72% and 1.37% respectively.
These closed at ₦388.75/USD, ₦390.27/USD, ₦394.02/USD and ₦408.37/USD respectively.
However, spot rate was unchanged at ₦361.00/USD; while, 1 month rates rose by 0.04% to close ₦387.51/USD.
More so, the Nigerian Autonomous Foreign Exchange (NAFEX) rate depreciated ₦0.75 to close at ₦386.50/US$1.00.
Similarly, activity level in the I&E Window declined this week as total turnover fell 43.7% to US$124.7 million from US$221.6 million recorded in the previous week.
“In the new week, we expect the Naira to depreciate against the USD, especially at the I&E FX Window amid declining external reserves”, Cowry Asset said.
FX Market: Naira Depreciated Against Dollar at IEW