Naira stable as external reserves credit with foreign inflow

By Julius Alagbe
The naira remained broadly stable across all segments of the market following the sustained increase in the foreign reserves, up by about US$400 million week on week (W-o-W) to US$43.0 billion as at the close of business on March 14th, 2018 largely driven by foreign portfolio inflows into the fixed income market.
In terms of the direction of rates, the Naira in the parallel market stood flat at N360.00/US$1.00 while the Central Bank of Nigeria (CBN) spot rate depreciated by 5kobo to close at N306.95/US$1.00.
Also, at the Investors and Exporters Window (I&E), the NAFEX rate depreciated 28 kobo W-o-W to N360.18/US$1.00 from N360.46/US$1.00 in the prior week. Activity level in the market declined as total turnover fell to US$1.7 billion, down 58.0% W-o-W from US$4.1 billion in the prior week.
However, total subscriptions in the FMDQ OTC futures market increased 8.8% W-o-W to US$7.3bn from US$6.7bn as the February 2020 and January 2020 received the most buying interest, up 39.8% and 31.9% W-o-W respectively. In line with historical trends, we expect the Apex bank to sustain interventions in the FX market to maintain exchange rate stability.