I & E FX window: Naira drops by 0.16% to N411.50/ $
By Kayode Tokede
Naira at the Investors & Exporters Foreign Exchange (I& E) FX window lost by 0.16 percent to N411.50 against the Dollar on Thursday.
Against other currencies, the local currency also depreciated against the Euro by 0.13 percent to close at N486.88 but it closed by 0.34% against the Pound Sterling at N565.85.
At the parallel market, while the Naira was flat closing at N710 and N503 against the Pound Sterling and Dollar respectively, it closed up against the Euro by 0.50percent at N595.
The exchange rate also depreciated against the US dollar at the parallel market to close at N503 against the Dollar compared to N502 against the Dollar recorded on Tuesday.
The drop in the value of the Naira may be attributed to the activities of speculators and lower liquidity at the foreign exchange market.
Money market rates were flat today as Open Buy Back and Overnight rates closed at 11.50percent and 12per cent respectively.
The bond market traded on a slightly positive note as yields inched down across some maturities, particularly at the midpoint.
The yields on the 7-year and 10-year benchmark bonds close down by 19basis points and 44basis points at 12.41percent and 12.70percent respectively, while the 5 year bond remained flat at 12.60percent.
Nigeria’s external reserve dipped by $46.3 million on Tuesday, 29th June 2021 to stand at $33.37 billion. This represents a 0.14percent decline compared to the $33.42 billion recorded the previous day.
According to the Central Bank of Nigeria (CBN) the country’s foreign reserve fell to its lowest position since October 2017, as its year-to-date decline surpasses $2 billion, while its month-to-date decline stands at $858.53 million. This is despite the recent bullish trend recorded in the global oil market.
The decline may be attributed to reduced foreign exchange earnings, especially from crude oil export due to the cut in production quota, as well as the widening international trade deficit.
The CBN, which operates a managed float foreign exchange system, also periodically supports the currency using the external reserves, and a lower reserve is expected to affect the currency.
