NAIRA TO DECLINE AT MOST MARKET

Naira to Decline at Most Market Segments as Demand for Dollar Persists

By Modupe Gbadeyanka

The continued demand for greenback at the local foreign exchange (forex) markets by foreign portfolio investors will sink the Nigerian Naira deeper this week, analysts at Lagos-based Cowry Asset have predicted.

In its weekly market report, the firm said the local currency will perform woefully across the most market segments, especially at the Investors and Exporters forex window.

Business Post reports that lately, there have been exit of foreign portfolio investors from Nigeria and other emerging markets.

However, in the just concluded trading week, Naira gained against the Dollar at the I&E segment by 0.03 percent to close at N364.02 amid declining external reserves which fell further by 1.31 percent to $42.78 billion as at Thursday, October 18, 2018.

But, the Naira/Dollar exchange rate was flattish week-on-week (w-o-w) at the interbank foreign exchange market to close at N362.52/$, amid the weekly injections of $210 million by Central Bank of Nigeria (CBN) into the foreign exchange market via the Secondary Market Intervention Sales (SMIS).

A breakdown of this intervention showed that $100 million was allocated to Wholesale SMIS, $55 million was allocated to Small and Medium Scale Enterprises and $55 million was sold for invisibles.

The exchange rate remained unchanged at both the Bureau De Change (BDC) segment and the parallel (black) market to close at N359/$ and N362/$ respectively as CBN’s sustained its weekly intervention.

Meanwhile, most dated foreign exchange rate forward contracts at the interbank over-the-counter (OTC) segment appreciated – 1 month, 2 months and 3 months gained 0.06 percent, 0.09 percent and 0.13 percent to close N367.50/$, N370.92/$ and N374.23/$ respectively; however, spot rate depreciated by 0.02 percent to close N306.50/$.
https://www.businesspost.ng/2018/10/22/naira-to-decline-at-most-market-segments-as-demand-for-dollar-persists/