The strengthened 0.19 per cent at the Investors’ & Exporters’ (I&E) Foreign Exchange Window this trading week ended June 11, 2020, to close at ₦385.75/ $1.00, from ₦386.50/$1.00.
Activity level in the I&E Window fell 33.3 per cent to $221.6m from $332.2m recorded in the previous week.
Meanwhile, the Central Bank of Nigeria (CBN) resumed FX sales this week, offering a total of $100.00 million via the Secondary Market Intervention Sales (SMIS) Wholesale Window. Meanwhile, the external reserves declined, down 0.2 per cent (US$82.3m) to US$36.5bn from US$36.6bn last week. The prospect for accretion in reserves remained weak as oil prices moderated to US$37.72/bbl. from $39.0/bbl last week.
The CBN spot rate traded flat all week to close at ₦361.00/$1.00, unchanged from the prior week. Similarly, at the parallel market, rates fluctuated during the week but traded flat w/w to settle at ₦450.00/$1.00.
At the FMDQ Securities Exchange (SE) FX Futures Contract Market, the total value of open contracts of the Naira settled at $14.33bn, up to $67.4m (0.5 per cent) from $14.26bn in the prior week. The MAY 2021 instrument (contract price: ₦423.06) received the most buying interest in the week with an additional subscription of $63.6m which took total value to $577.7m. On the other hand, the OCT 2020 instrument (contract price: ₦403.50) was the least subscribed, with an additional subscription of $3.3m for a total value of $1.2bn.
Analysts at Afrinvest stated that they expect rates to continue to trade within a tight band across different segments of the FX market.