I & E FX: Naira depreciates by 0.17% to close at N394.50/$  

By Kayode Tokede

The naira weakened by 0.17 per cent to close at N394.50 against the dollar at the  Investors & Exporters Foreign exchange Window (I & EFX) on Wednesday.

Against other currencies, the naira closed up by 2.53 per cent and 2.74 per cent against the Euro and pounds to print at N470.16 and N519.91 respectively.

According to the FMDQ Exchange, a total of $52.50 million was traded by Investors and exporters on Wednesday as against $33.51million traded on Tuesday.

At the parallel market, while the naira remained flat against the dollar and pounds to close at N470 and N628 respectively, it gained 0.35per cent against the euro to close at N570.

Analysts at investmentOne research stated that, “Going forward, we expect the FX market to be dictated by heightened dollar demand and Central Bank of Nigeria (CBN) foreign exchange policies.”

Analysts at United Capital in their Nigeria Outlook for 2021: “A short recovery” report, said, “on the exchange rate, we expect a potential convergence of   rates when the CBN begins full intervention at the I&E window. As such, we anticipate that the parallel market will appreciate from N470/$ towards the NAFEX rate which has now been adjusted to N410/$.”

However, the money market rates fell today as Open Buy Back and Overnight rate decreased by 25bps each to close at 0.38per cent and 0.75per cent respectively.

The bond market traded on a quiet note today as yields remained flat across most tenures.

“We witnessed the yields on the 7yr and 10yr benchmark bonds close flat at 6.33 per cent and 7.27 per cent respectively, while the 5yr benchmark bond inched up by 17bps to close at 5.61 per cent.

“In the near term, we expect market activity to be influenced by liquidity levels and foreign investor participation,” Analysts at investmentOne research added.