Naira on Monday resumed depreciation against the dollar, after exchanging steady for four trading days at the parallel market, popularly called black market.
After trading on Monday, one dollar was sold for N1,008 as against N1,000 on Wednesday last week. This represents a 0.8 percent fall against the dollar.
One trader told BusinessDay that there was a slight increase in the demand for dollars by individuals who want to travel either for business or tourism.
Some Nigerians travelled to Morocco for the annual meetings of the International Monetary Fund (IMF)/World Bank, as well as other meetings happening offshore.
At the Investor’ and Exporters’ (I&E) forex window, the naira strengthened by 4.30 percent as the dollar was quoted at N741.85 on Friday compared to N775.20 quoted on Thursday, data from the FMDQ showed.
Last week, the Naira exhibited strength at the official and the parallel markets against the United States’ dollar on the back of cooling demand pressure for the local currency across the board.
Accordingly, the naira edged the dollar by 1.78 percent week-on-week at the official market, closing at N741.85/$1. Also, at the parallel market, the naira appreciated by 0.79 percent week-on-week to 1,000/$1 as demand pressure ease from foreign exchange users, a report by Cowry Asset Management Limited stated.
According to the report, it was a mixed outing at the FMDQ Securities Exchange (SE) FX futures contract market, where the dollar gained across the mid to long end of the curve against the local currency. Notably, forward rates appreciated in favour of the dollar by 0.22 percent, 2.01 percent, and 3.06 percent accordingly while at the 1-month and 2-month forward contracts, the dollar skidded by 0.61 percent, and 0.06 percent week on week in that order to close at N786.31/$1 and N796.83/$1.
Cowry Research anticipates the naira to trade in a relatively calm and positive band barring any further market distortion. Also, market players are expecting policy direction from the apex bank while all eyes stay on the Monetary Policy Committee (MPC) for the next meeting