Naira Remains Stable With Foreign Exchange Market Intervention
Naira remained stable as the Central Bank of Nigeria, CBN, resumed weekly intervention in the foreign exchange market to support the local currency.
Last week, analysts said they observed a faster growth in foreign reserves levels as it rose further by US$30.4 million, pulling the foreign reserves up to US$44.84 billion relative to US$44.79 billion in the prior week.
Analysts are of the view that the sustained increase in foreign portfolio buying interest in the fixed income market is largely responsible for the accretions to the reserves although we also acknowledge that stable oil prices and output have continued to favour increased forex earnings.
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In the forex market, the CBN resumed its weekly sales, injecting US$205 million into the market to support the currency.
The wholesale segment of the market was offered US$100 million while the Small and Medium Enterprises (SMEs) segment received US$55 million.
Similarly, customers requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were allocated US$50 million.
In the parallel market, the Naira traded flat at N360.00/US$1.00 while for the CBN spot and the Nigerian Autonomous Foreign Exchange (NAFEX) rates, the naira depreciated by 5kobo week on week and 23kobo week on week to N307.00/US$1.00 and N360.88/US$1.00 respectively in the previous week.
Also, the total turnover in the investors and exporters ,I&E, window was recorded at US$0.77 billion for the 5-day trading week which ended on the 10th of May relative to the total turnover of US$1.0 billion recorded in the prior 4-day trading week.
Also, total subscriptions in the FMDQ OTC futures market increased 3.8% week on week to US$8.7 billion from US$8.4 billion based on investor buying interest in the July 2019 instrument, which was up 17.1% to US$392.8 million from US$335.2 million in the prior week.
Analysts at Afrinvest said that, in the coming week, they have expectation of a stable trading of the naira across markets remains unchanged.
Naira Remains Stable With Foreign Exchange Market Intervention
