Naira depreciates by I & E FX window by 0.16%
By Kayode Tokede
Naira against the Dollar at the Investors & Exporters Foreign Exchange window (I & E FX) on Monday depreciated by 0.16 per cent to close at N411.67 from N411.04 it opened for trading.
Also at the I &EFX window, the Naira lost by 1.09per cent and 0.61per cent against the Pound Sterling and Euro closing at N572.54 and N489.91 respectively.
According to FMDQ Exchange, a foreign exchange turnover of $94.17million was traded by investors & exporters on Monday.
At the parallel market, while the Naira closed up by 0.50per cent against the Euro at N592, it lost 0.40per cent to close at N500 against the Dollar. Conversely, it closed flat against the Pound Sterling at N710.
The naira fell at the parallel market after a significant increase due to improved foreign exchange supply with speculators losing big as ABCON had warned against hoarding and speculative behaviour by dealers, which they said would result in heavy collateral losses.
The CBN, as a fallout of its meeting with ABCON, has moved to increase foreign exchange allocation to BDCs and sustain the funding for about 5,000 members of the association.
“Going forward, we expect the FX market to be dictated by heightened dollar demand and CBN FX policies,” analysts at Investment One research said.
Money market rates declined today as Open Buy Back and Overnight rates were down by 25basis points each to close at 18.50per cent and 19per cent respectively.
The bond market traded on a bullish note on Monday, as yields declined on most maturities.
The yields on the 7-year and 10-year benchmark bonds close down by 26basis points and four basis points to 12.51per cent and 12.47per cent respectively, while the yield on the 5yr benchmark bond was flat at 12.52per cent.
“In the near term, we expect market activity to be influenced by liquidity levels and foreign investor participation,” they explained.
Nigerian NewsDirect had reported that nation’s foreign reserves dropped by $424.8million in 10 days to $33.79 billion as at June 17, 2021 from $34.22billion it commenced in June.
Nigeria’s foreign exchange buffer $33.79 billion is the lowest since October 2017 as the apex bank sustained intervention in key sector of economy.
In March, the reserves lost $178million after dropping from $34.99billion as of March 1 to $34.82billion as of March 31.
In February, the reserves dropped by $1.1billion, falling from $36.19billion as of February 1 to $35.09billion on February 26.
The CBN, in its January economic report, said, “As a consequence of the lower foreign exchange receipts, the official external reserves declined.
“Foreign reserves stood at $35.44bn at the end-January 2021, a decrease of 2.8 per cent and 3.5 per cent from $36.46billion in December 2020 and $36.73billion in January 2020.”
