Naira on Monday closed unchanged at N780 per dollar at the parallel market called the black market, following moderation in demand for the greenback.
Naira had depreciated against the dollar at the parallel and official market following shortage of the greenback, occasioned by declining inflows, high import demand, oil theft and subsidy, among others.
After the Central Bank of Nigeria (CBN) announced plans to redesign and replace the nation’s banknote, the local currency weakened to as low as N890 per dollar at the unofficial and N446/1$ at the official market, known as Investors and Exporters (I&E) forex window.
Naira appreciated marginally at the I&E window as the dollar was quoted at N445.38 on Monday as against the last close of N445.67 on Friday, data from the FMDQ indicated.
Most currency dealers who participated at the FX auction on Monday maintained bids between N439.99 (low) and N447.50 per dollar (high).
Read also:Experts at #NES28 proffer solution to naira crisis
“At the close of the week, we saw the local currency experience a slight calm in demand in the foreign exchange market following announcements by deposit money banks on the amount of permissible dollar purchases from banks and its availability for Business Travel Allowance (BTA), and Personal Travel Allowance (PTA), purposes,” said analysts at Cowry Asset Management Limited.
Consequently, the Naira edged the dollar by N0.08 (0.02%) week on week at the importers and exporters window to N445.67/USD from N445.75/USD it closed the previous week as FX users continue prowling for FX at the open market whose rates are determined by the forces of demand.
A report by Cowry Asset Management show that at the open parallel market FX window the Naira lost N59 or 8.14 percent week on week to close the week at N784/USD from N725/USD in the previous week’s close as “we begin to approach festivities coupled with the reason by users to hedge against the weakening naira whose purchasing power has also been eroded by the spiralling inflationary levels.”
At the Interbank foreign exchange forward contracts market, the spot exchange rate remained unchained from the previous week as it closed the week at N445/USD from last week. Analysis of the Naira/USD exchange rate in the Naira FX Forward Contracts Markets, indicated that there was a mixed trend across tenors as seen in the 1 month, 2 month and 3 month contracts all gaining by 0.4 percent, 0.21 percent and 0.75 percent week on week to close the week at a stronger offer contact price of N449.28/USD, N452.67/USD and N457.27/USD in that order.
On the flip side, the 6 month and 12 month forward contracts saw the naira edged out by the dollar by 2bps and 18bps from which they were priced at N477.02/USD and N504.37/USD respectively.