Naira Appreciates Against USD at Investors & Exporters Window

Naira appreciated against dollar, USD, at the Investors & Exporters window (IEW) as bonny light crude price rises.

Cowry Asset Management said this is in line with its expectations, as Naira appreciated by 0.19% to close at ₦386.50/USD.

The trend which analysts connect to Bonny Light crude price appreciation of 3.92% to USD39.77/barrel.

However, Naira closed flat against the USD at the Bureau De Change and the parallel markets at ₦440.00/USD and ₦450.00/USD respectively.

Naira Appreciates
Godwin Emefiele, Governor Central Bank of Nigeria

Also, rates closed flat at the Interbank Foreign Exchange market, at ₦358.51/USD, amid weekly injections of USD210 million by CBN into the foreign exchange market.

The breakdown of the CBN FX sales shows that USD100 million was allocated to Wholesale Secondary Market Intervention Sales (SMIS).

Another USD55 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for invisibles.

Meanwhile, the external reserves declined, down 0.2% to US$36.5 billion from US$36.6 billion last week.

Afrinvest said the prospect for accretion in reserves remained weak as oil prices moderated to US$37.72/bbl. from $39.0/bbl last week.

Elsewhere, the Naira/USD exchange rate fell – that is, Naira appreciated- for most of the foreign exchange forward contracts.

Contracts for 1 month, 2 months, 3 months, 6 months and 12 months rates decreased by 0.44%, 0.67%, 0.89%, 1.56% and 2.93% respectively,

Then, close at ₦387.36/USD, ₦389.21/USD, ₦391.32/USD, ₦396.88/USD and ₦414.06/USD respectively.

However, spot rate was unchanged at ₦361.00/USD.

“In the new week, we expect the Naira to appreciate against the USD, especially at the I&E FX Window following recent marginal rise in crude oil prices”, Cowry Asset said.

Meanwhile, at FMDQ Securities Exchange (SE) FX Futures Contract Market, the total value of open contracts of the Naira settled at $14.33 billion.

This represent an increase of $67.4 million (0.5%) from $14.26 billion in the prior week.

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The MAY 2021 instrument at contract price of ₦423.06 received the most buying interest in the week with additional subscription of $63.6 million which took total value to $577.7 million.

On the other hand, the OCT 2020 instrument with contract price of ₦403.50 was the least subscribed, with an additional subscription of $3.3 million for a total value of $1.2 billion.

“Next week, we expect rates to continue to trade within a tight band across different segments of the FX market”, Afrinvest stated.

Naira Appreciates Against USD at Investors & Exporters Window

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