The foreign exchange market ended the five trading days on Friday with Naira appreciating marginally across market segments following increased liquidity.
Naira strengthened marginally by N0.03k to close at N411.25k on Friday compared to the opening rate of N411.28k on Monday at the Investors and Exporters (I&E) forex window, data from the FMDQ indicated.
Week-on-week, Naira depreciated 0.10 percent from N411.67k last week Friday to N411.25k this Friday at the same official market.
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On Monday the foreign exchange market opened with Naira firming up by N0.39k to close on N411.28k per from N411.67k closed the previous Friday.
It strengthened further on Tuesday to N410.83k, which was N0.45k stronger than Monday’s closing rate.
On Wednesday, Naira depreciated by N0.67k to close at N411.50k/$ compared to Tuesday’s closing rate.
Thursday trading saw the local currency strengthening by N0.80k to N410.70k from Wednesday’s N411.50k per dollar.
The foreign exchange market daily turnover increased by 38.56 percent to end the week at $139.23 million on Friday from $100.48 million recorded on the opening trading day.
Dollar liquidity rose by 16.94 percentage points from 21.62 percent last week to 38.56 percent this week.
Naira/dollar exchange rate closed flat at N380.69/USD at the Interbank Foreign Exchange market amid weekly injections of USD210 million by CBN into the forex market, a report by Cowry Asset Management Limited noted.
A breakdown of the disbursement showed that USD100 million was allocated to Wholesale Secondary Market Intervention Sales (SMIS), USD55 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for invisibles.
Elsewhere, the Naira/USD exchange rate rose (depreciated) for all of the foreign exchange forward contracts: 1 month, 2 months, 3 months, 6 months and 12 months exchange rates rose by 0.08 percent, 0.27 percent, 0.23 percent, 0.45 percent and 0.51 percent to close at N413.43/USD, N416.17/USD, N418.11/USD, N424.09/USD and N435.74/USD respectively. Meanwhile, the spot rate remained flat at N379.00/USD.
“In the new week, we expect Naira to weaken against the greenback at most FX Windows amid declining external reserves which suggests a weakening capacity of the apex bank to continue to defend the local currency,” analysts at Cowry Asset Management Limited said.
Nigeria’s external reserves declined Week-on-Week by 0.71 percent to close at USD33.28 billion as of July 1, 2021.
Naira lost 0.19 percent to end the week at N503 per dollar on Friday as against the opening rate of N502/$ on Monday at the parallel market.
At the Bureau De Change (BDC) segment of the foreign exchange market, Naira weakened by N5 or 1.01 percent to close the week at N500 compared to N495 per dollar, which was the opening rate.
