The local currency exchanged with the dollar at N740/$ on Friday and Monday, stronger than N745/$ on Thursday at the black market. At the In...
The local currency exchanged with the dollar at N740/$ on Friday and Monday, stronger than N745/$ on Thursday at the black market.
At the Investors and Exporters (I&E) forex window Naira depreciated by 0.05 percent as the dollar was quoted at N456.50 as against the last close of N456.25, data from the FMDQ indicated.
Most currency dealers who participated at the auction on Friday maintained bids between N440.00 (low) and N456.50 (high) per dollar.
The daily foreign exchange market turnover increased by 39.95 percent to $155.86 million compared to $111.37 million recorded on Thursday.
“It was a mixed bargain of activities for currency traders and speculators ahead of the year-end seasonality,” analysts at Cowry Asset Management Limited said.
The central bank made a policy amendment on the earlier imposed withdrawal limits and charges for corporates and individuals to N500,000 and N5 million from N100,000 and N500,000 weekly limits respectively. Thus, reactions have trailed the move by the apex bank citing the move to be politically motivated.
A report by Cowry Asset Management noted that at the the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) Naira skid for another week by N5 or 1.11 percent week on week to close the week at N456.50 against the greenback from N451.50/USD in the previous week’s close.
This comes after the rollout of banknotes by the CBN saw limited supply from banks to users ahead of year-end festivities.
On the other hand, the exchange rate between the naira and dollar stayed in the positive region for the naira from the previous week’s close at the open parallel market window to close with a 0.54 percent or N4 week on week gain to N741/USD from N745/USD last week as traders wait on the sidelines on the next move following CBN’s policy on naira withdrawal limit last week.
At the interbank foreign exchange forward contracts market, the spot exchange rate remained unchained from the previous week as it closed the week at N445/USD from last week.
An analysis of the Naira/USD exchange rate in the Naira FX Forward Contracts Markets, showed there was a bearish trend across most tenor gauges for the Naira Forward Contracts against the greenback as there was depreciation in the Naira index value across the 1 month, 2 month, 3 month and 6 months tenors by 0.83 percent, 0.34 percent, 0.89 percent, and 1.24 percent respectively to close at offer prices of N468.95/USD, N472.26/USD, N475.22USD, and N4505.22/US.
However, the long tenor contract with 1 year maturity gained by 1.65 percent week on week to close at N527/USD.
Last week the Bonny light crude price bounced back by 3.04 percent or (USD2.6) week on week to close the week at USD82.08 per barrel from USD84.65 per barrel in the previous week. Meanwhile, oil benchmarks’ recent positive rally now looks dented by sentiments on potential rate tightening by the Fed and rising cases of covid from China.
We expect to see increased demand for the greenback as well as the local banknotes for the year-end seasonal activities. However, the jury is out to watch as we begin to see the multiplier effect of the policy across facets of the economy,” analysts at Cowry Asset Management said.
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