Naira Closes Week Strong Despite 34.3 Percent Decline In Liquidity

At the end of five trading days at the foreign exchange market, the naira kept strong against the dollar despite a 34.30 percent drop in liquidity at the official market.

Nigeria's local currency, which started the week at N411.50k/$ on Monday at the official market, edged up  0.17 percent to N410.80k per dollar at the close of the markets on Friday.

According to data from FMDQ, daily foreign exchange market turnover closed at $109.03 million on Friday, which was lower than the $166.06 million recorded at the opening of trading on Monday.

Elsewhere, the Naira/USD exchange rate fell (Naira appreciated) for most of the foreign exchange forward contracts: 1 month, 2 months, 3 months, 6 months and 12 months exchange rates fell by 0.03 percent, 0.13 percent, 0.11 percent, 0.10 percent and 0.04 percent to close at N412.22/USD, N413.47/USD, N415.27/USD, N421.65/USD and N434.91/USD respectively. The spot rate, on the other hand, remained flat at N379.00/USD.

However, the market ended the week with Naira weakening by 0.98 percent against the dollar as demand increased at the parallel market, popularly called the black market.

After trading during the week, the naira/dollar exchange rate closed at N515/$ as against the opening rate of N510 per dollar at the black market.

The Naira/dollar exchange rate closed flat at N380.69/USD at the Interbank Foreign Exchange market amid weekly injections of USD210 million by CBN into the forex market, according to a report by Cowry Asset Management Limited.

A breakdown of the disbursement showed that 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.