The Naira is expected to stabilise against the United States’ Dollar at most of the foreign exchange windows in the new week, as the Central Bank of Nigeria begins the process of harmonising the exchange rates.
The currency had weakened against the USD at most market segments despite the CBN’s intervention in the previous week.
It depreciated against the USD last week at the Investors and Exporters Window, Bureau De Change and parallel (black) markets by 0.33 per cent, 0.42 per cent and 0.21 per cent to close at N411.67/USD, N480/USD and N484/USD respectively.
The apex bank had in the course of last week made efforts to harmonise the official rate of N379/USD and the Nigerian Autonomous Foreign Exchange Rate Fixing Methodology (I&E) window rate as it removed the official rate from its website.
The greenback has been under pressure as external reserves, since the beginning of May, declined by 0.86 per cent to $34.58bn last Tuesday.
Last week also saw the NGN/USD exchange rate close flat at N380.69/USD at the Interbank Foreign Exchange market amid injection of $210m by the CBN into the forex market.
While $100m was allocated to Wholesale Secondary Market Intervention Sales, $55m apiece was allocated to Small and Medium Scale Enterprises and sold for invisibles.
Elsewhere, the Naira/USD exchange rate depreciated for most of the foreign exchange forward contracts one month, two months, three months, six months and 12 months.
The exchange rates rose by 0.02 per cent, 0.11 per cent, 0.11 per cent, 0.04 per cent and 0.01 per cent to close at N413.06/USD, N416.22/USD, N418.97/USD, N427.67 and N445.50/USD respectively.
The spot rate, however, remained flat at N379/USD.
Analysts at Cowry Asset Management said, “In the new week, we expect Naira/USD to stabilise at most FX windows as CBN has begun the process of harmonising the exchange rates, given the report that it (no) longer sells dollars to the public sector at the official rate. It now sells at the I&E FX window at the going rate.”
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