Naira depreciates against Dollar by 0.09% at I&E Window

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By Kayode Tokede

The Naira depreciated week-on-week (w-o-w) against the dollar at the Investors & Exporters Foreign Exchange Window (I&E FXW) by 0.09per cent to close at N360.32/Dollar

The depreciation is coming on the heels of weekly injections by Central Bank of Nigeria (CBN) of $210 million into the foreign exchange market.

Of the $210 million, $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 Naira also depreciated at the parallel market by 0.28per cent to N363.00/Dollar.

However, the Naira/Dollar rate remained unchanged at the interbank foreign exchange market and the Bureau De Change segments at N330.00/Dollar and N360/Dollar respectively.

Meanwhile, all dated forward contracts at the interbank Over-The Counter (OTC) segment appreciated amid a 0.51 per cent w-o-w increase in external reserves to $46.75 billion – spot rate, 1 month, 2 months, 3 months and 6 months contracts fell by 0.02per cent, 0.01per cent, 0.10 per cent, 0.18per cent and 0.70per cent to close N305.55/Dollar, N363.72/Dollar, N367.24/Dollar, N370.73/Dollar and N382.85/Dollar respectively.

Analysts at Cowry Assets limited in a report said the apex bank sold Treasury Bills worth N500 billion via the secondary market.

According to Cowry assets report, “The outflows were partly offset by inflows worth N476.21 billion in matured treasury bills. Nevertheless, NIBOR fell for all tenor buckets amid sustained liquidity ease in the finanacial system – in line with our expectation: NIBOR for overnight, 1 month, 3 months and 6 months tenor buckets fell w-o-w to 3.00% (from 4.56%), 13.43% (from 14.64%), 14.17% (from 15.28%) and 15.35% (from 17.06%) respectively.

“Meanwhile, while Standing Deposit Facility (SDF) which fell w-o-w by 3.93% to N593.89 billion, outweighed Standing Lending Facility (SLF) which also fell w-o-w by 9.51per cent to N211.37 billion; indicative of excess financial system liquidity.”

The report added that, “NITTY fell for all maturities tracked on sustained bullish activity: yields on the 1 month, 3 months, 6 months and 12 months maturities fell to 12.52% (from 14.09%), 13.02% (from 13.61%), 13.65% (from 14.31%) and 14.72% (from 14.90%) respectively.

“This week, T-bills worth 263.37 billion will mature via both primary and secondary market which will more than offset the treasury bills worth N58.49 to be auctioned via the primary market; viz: 91-day bills worth N5.85 billion, 182-day bills worth N29.25 billion and 364-day bills worth N23.396 billion.

“Hence we expect sustained ease in financial system liquidity with concomitant moderation in interbank rate. This, however, should warrant increased OMO auctions in order to mop up excess liquidity,” the report by Cowry Assets added.

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