Naira gains 0.16% at I & EFX window
By Kayode Tokede
Naira at the Investors & Exporters Foreign Exchange ( I & EFX) window gained 0.16 per cent on Friday to close at N409 against the Dollar.
Naira at the I & E FX window also gained by 0.19per cent and 0.01per cent against Euro and Pound Sterling closing at N483.95 and N558.80 respectively.
A foreign exchange turnover of $55.21 million was traded at I & E FX window on Friday, according to the FMDQ.
At the I & E FX window, total turnover as of Thursday decreased by 2.2per cent to $146.34 million, with trades consummated within the N394.00 – 405.00/$ band.
In the Forwards market, the rate appreciated across the 1-month (+0.2 per cent to N411.88/$), 3-month (+0. per cent to N415.27/$), 6-month (+1.6per cent to N420.53/$) and 1-year (+2.7 per cent to N433.85/$) contracts.
“We expect improved liquidity in the IEW over the medium term, given the higher oil prices and an expected increase in crude oil production volume. Accordingly, we expect the naira to remain relatively range-bound (N410.00/$ – N415.00/$) at the IEW.
“Similarly, we believe the CBN will devalue the naira by 5.3 per cent to N400.00/$ at the interbank market to narrow the gap with the IEW rate,” according to analysts at Cordros Capital.
At the parallel market, while the Naira closed flat against the Pound Sterling and Dollar at N670 and N485 respectively, it lost 0.17per cent against the Euro to close at N574.
Our correspondent gathered that Naira at the Interbank market of the 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 said.
“Money market rates declined today with Open Buy Back and Overnight rates decreasing by 225basis points and 250basis points to 12.25per cent and 12.50 per cent respectively.
“The bond market was somewhat negative today with yields rising on some maturities.
“While we witnessed yields on the 7-year and 10-year benchmark bonds close flat at 10.95 per cent and 11.51 per cent respectively, the yield on the 5yr benchmark bond rose by 45basis points to close at 10.49per cent.
“In the near term, we expect market activity to be influenced by liquidity levels and foreign investor participation,” according to analysts at Investment One research added.
The apex bank on its official website disclosed that the nation’s foreign reserves closed on Wednesday at $34.977billion.
According to the CBN, the nation’s foreign reserve gained $129.8 million on Tuesday to close at $34.975 billion, the highest single-day gain recorded in about 3 months.
This indicates a 0.37per cent increase when compared to $34.85 billion recorded on Thursday 1st April 2021.
This also represents the 11th consecutive increase in the country’s external reserve position having endured a significant downturn in the early parts of the year. Nigeria’s reserve has added a total of $558.8 million in 11 days.
This recent growth could however be attributed to the increase in crude oil prices recorded earlier in March and the possible increase in diaspora remittance as the CBN offers incentives for every unit of dollar received from diaspora remittance.
Nigeria will now hope for the reserve to $40 billion so as to be able to meet up with pent-up demand that had accumulated since the crash of crude oil price in 2020.
