Naira depreciates at I & E FX window as reserves drop to $34.42bn
By Kayode Tokede
Naira at the Investors & Exporters Foreign Exchange (I & E FX) window depreciated by 0.03 per cent on Monday to close at N410.13 against the Dollar.
The local currency also lost by 0.84per cent and 0.48 per cent against the Euro and Pound Sterling closing at N488.36 and N566.87 respectively.
FMDQ Exchange stated that foreign exchange turnover traded by investors and exporters was $25.88 million.
At the parallel market, while the Naira closed flat against the Pound Sterling at N680, it depreciated by 0.21per cent to close at N486 against the Dollar. Conversely, it gained 0.17per cent against the Euro to close at N582.
Naira at the interbank market of the Central Bank of Nigeria (CBN) traded flat at N379 against the Dollar.
“Going forward, we expect the FX market to be dictated by heightened dollar demand and CBN FX policies,” analysts at Investment One research stated.
“However, the money market rates decreased today as Open Buy Back and Overnight rates fell from 25per cent and 25.50 per cent to 14.50 per cent and 14.75 per cent respectively.
“The bond market was somewhat positive today as yields declined on some maturities. We witnessed yields on the 7-year and 10-year benchmark bonds close flat at 10.13 per cent and 10.59 per cent respectively, while the yield on the 5yr benchmark bond closed down by 2bps to 9.86 per cent.
“In the near term, we expect market activity to be influenced by liquidity levels and foreign investor participation,” they added.
Meanwhile, nation’s foreign reserves declined by 0.07 on Thursday, 18th March 2021 to stand at $34.42 billion being a record low in over 10 months.
The country’s external reserve declined from $34.44 billion recorded as of Thursday, 18th March 2021 to stand at $34.42 billion as of 19th March 2021.
The last time Nigeria’s external reserve position, dropped to this low, was on the 8th of May 2020, when the reserve stood at $34.29 billion
Meanwhile, the latest decline indicates that Nigeria’s current external reserve position has lost about $683.2 million in the month of March 2021.
It is worth noting that the recent bearish run at the global crude oil market could further dip the country’s external reserves as Brent Crude oil is currently selling at $60.96 per barrel.
