Naira Sold for N429 as CBN Draws Down FX Reserves
The Nigerian local currency, the naira, was sold for N429 per the United States (US) dollar at the official window on Friday as external reserves hit eight weeks low.
Amidst demand pressures, Nigeria’s naira lost significant value at the official window, shedding N6 or 1.42% from N423 to close at N429 in the just concluded week, data from FMDQ Exchange tracked shows.
Last week, Nigeria’s external reserves fell by $169.21 million week on week to USD39.22 billion, according to Central Bank of Nigeria’s foreign currencies movement data.
Across the FX windows, analysts at Cordros Capital said in a market note that the naira appreciated by 0.2% to N429.00 at the Investors and Exporters’ foreign exchange window.
In the parallel market where the local currency exchanges hand freely, the naira depreciated significantly, losing as much as 13.0% to the week at N715.00. MarketForces Africa channel checks show that some currencies traders sold below N715 but there was an apparent scarcity in the free market last week.
At the Investors and Exporters foreign exchane window, analysts at Cordros Capital Limited said in their weekly report that total turnover or volume of dollars transacted fell by 53.1% from the beginning of the week to USD403.64 million on Thursday.
Trades consummated within the N410.00 – 444.00 per US dollar band, according to analysts’ notes. Meanwhile, in the forwards market, the exchange rate weakened across contracts.
As of Friday, market trading data shows that 1-month contract declines by 0.2% to N428.04, 3-month sheds 0.1% to N435.75, 6-month weakened by 0.2% to N448.87 and 1-year dropped 0.3% to N473.02.
At the Interbank foreign exchange market, the exchange rate closed flat at N430.00 per greenback amid the Central Bank of Nigeria’s (CBN) weekly injections of $210 million. READ: FX Adjustment at Investors Window Draws Naira Closer to Fair Value
Of the sum injected into the market, $100 million was allocated to Wholesale Secondary Market Intervention Sales (SMIS), $55 million was allocated to Small and Medium Scale Enterprises and $55 million was sold for Invisibles.
# Naira Sold for N429 as FX Reserves Hit 8-Week Low