Naira depreciates at I & E FX market to N397.63/$
Naira at Investors & Exporters Foreign Exchange (I& E) foreign exchange market depreciated by 0.54 per cent to close at N397.63 against the dollar on Thursday.
As the local currency gained 0.64 per cent against the euro at N453.06, it inched down by 0.06 per cent against the pound sterling to close at N517.36.
A turnover of $47.72million was traded at I & E FX market on Thursday, according to FMDQ.
Turnover at the I&E FX window dropped by 26.2per cent from $71.25 million on Tuesday to $52.59 million on Wednesday.
However at the parallel market, the naira closed flat against the euro, pound sterling and dollar at N580, N655 and N480 respectively.
Our correspondent gathered that naira remained flat at N379 against the dollar at the Interbank market of the Central Bank of Nigeria (CBN).
To streamline foreign exchange supply and ensure there is enough to meet rising demand, the CBN moved to ensure strict monetary control of the foreign exchange market threatening to expel exporters who refuse to remit foreign exchange proceeds in the NAFEX market. It also warned against paying diaspora remittances in naira.
The CBN may have also confirmed the foreign exchange pressures businesses are facing in its monetary policy communique of January 26, 2020, when it cited it as a reason for the weak purchasing managers index.
“This weak performance was attributed to the resurgence of the pandemic, foreign exchange pressures, increased costs of production, a general increase in prices and decline in economic activities.”
“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 rose today as Open Buy Back and Overnight rates increased by 125 basis points and 150 basis points to 12.50per cent and 13 per cent respectively.
“The bond market was somewhat positive today as yields declined at the short and long end of the curve. Nonetheless, we witnessed the yields on the 5yr, 7yr and 10yr benchmark bonds close flat at 6.34 per cent, 8.42 per cent and 8.87 per cent respectively.
“In the near term, we expect market activity to be influenced by liquidity levels and foreign investor participation,” they added.
