At the concluding week, Naira has appreciated against the US dollars with a percentage of 0.04% which is 386.36/U$D. Investors FX Windows (I&E FXW) Bonny light crude price rose week-on-week by 2.34% to USD40.70 as of Thursday, June 25, 2020.
Since this coronavirus pandemic started, the country Nigeria has faced so many economic crises and meltdown, USD that was on 360 before the pandemic rose up to 390 and was still counting. Now it seems there is a little light at the end of the tunnel as NGN/USD exchange rate rose (i.e Naira depreciated) by 1.57% and 1.10% to close at N452.00/USD and N460.00/USD respectively at the Bureau De Change and the parallel (“black”) markets.
At Interbank Foreign Exchange market, USD has a close flat rate of N38.51 per USD, and the weekly injections of USD210 million CBN into the foreign exchange market: USD100 million was allocated to Wholesale Secondary Market Intervention Sales (SMIS), USD55 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for Invisibles.
However NGN/USD exchange rate has Rosen for most of the foreign exchange forward contracts: 1 month, 2 months, 3 months, 6 months and 12 months rates increased by 0.11%, 0.23%, 0.31%, 0.65%, and 1.38% respectively to close at N387.95/USD, N389.66/USD, N391.47/USD, N396.60/USD, and N414.02/USD respectively.
NGN/USD Expectation In The Coming Week
With the way things are going, we expect NGN to depreciate against the USD especially in the aspect of I&E FX Window amid declining external reserves.