Naira at I & E FX market settles at N410.00/$


By Kayode Tokede

Naira traded flat at N410 against the dollar at Investors & Exporters Foreign Exchange Market ( I & E FX) market on Monday.

The naira lost by 7.49 and 7.62 per cent at I & E FX against the euro  and pound sterling at N499.03 and N577.82 respectively.

The FMDQ Exchange stated that a turnover of $52.58 million was traded by Investors & Exporters.

At the parallel market, the Naira closed down by 0.76 per cent, 0.52 per cent and 0.42 per cent against the pound sterling, euro and dollar to close at N660, N580 and N480 respectively.

Naira at the interbank market of the Central Bank of Nigeria (CBN) traded flat at N379 against the dollar on Monday.

“Going forward, we expect the FX market to be dictated by heightened dollar demand and CBN FX policies,” analysts at Investment one research said on Monday.

Money market rates declined as Open Buy Back and Overnight rates fell from 20 per cent and 20.50 per cent to close at 15 per cent and 15.25per cent respectively.

The bond market was somewhat muted on Monday.

There was yields on the 5yr, 7yr, and 10yr benchmark bonds close flat at 9.60per cent, 10.45 per cent and 10.79 per cent respectively.

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

Analysts at Cordros capital had said, “Given the expected pressure on the external reserves amid weak portfolio inflows, we expect the naira to depreciate closer to its fair value implied by the long-run REER (N453.67) in the medium term.

“Our baseline expectation is that the CBN will depreciate the naira by 5.3per cent to N400/$ in the interbank market and 5.1 per cent to N415/$ at the I & E FX.”

However, the country’s foreign reserve dipped further by Thursday, 18th February 2021, to stand at $35.47 billion.

This represents a decline of 0.15per cent compared to $35.53 billion recorded as Wednesday, 17th February 2021.

Despite rallying oil prices, Nigeria’s external reserve has recorded a steady decline since 25th of January 2021, losing a sum of $958.1 million in less than a month.

It is worth noting that despite the significant increase recorded earlier in January, the current reserve positive is only $99.9 million more than $35.37 billion recorded as of 31st December 2020.