Naira to remain stable amidst regular FX injections

…As Naira remains flat at official, parallel markets
…Gains at I&E FX market, as BDCs close at N361/|$1
Foreign exchange traders are optimistic that the Nigerian currency, Naira, will remain stable during the week ahead, amidst expectations that the forex market and its segments will be continually lifted by the weekly FX intervention(s).

The naira, however, remained flat at N363 in the parallel market, and N305.85 against the US Dollar at the official forex market.

At the close of Friday’s trading, the local currency, at the Investors and Exporters (I&E) FX window, gained by 0.04 per cent to settled at a better rate of N360.27, against N360.27 traded on Thursday.

Also, the Bureau De Change (BDCs) forex market segment traded Naira to the Dollar at N361.

Traders believed that the naira is likely to remain stable against the dollar next week , despite a sell-off this week on the stock and bond markets started by international investors, traders said.

Nigerian bond yields rose across maturities, while stocks fell on Wednesday , as global risk-off sentiment spread to local assets.

Traders said the impact of the sell-off was limited on the naira as there was no sign of pressure building up on the currency.

Although, the Africa’s largest economy plans to redeem N762.5 billion naira, worth of Treasury bills from the proceeds of a planned $2.5 bn Eurobond, to lower borrowing costs for the government.

Thereby, expected to save N64bn each year after it refinances the local bills with the dollar debt, she told reporters following a cabinet meeting in the capital, Abuja.

Meanwhile, the apex bank in its latest report, explained that foreign exchange inflow into the economy increased in the fourth quarter of 2017, as a result of the rise in international spot price of Nigeria’s reference crude oil, the Bonny Light to an average of $62.48 per barrel in the fourth quarter of 2017.

“The rise in crude oil price was attributed to the decline in United States shale oil output, increased global demand for refined petroleum and extension of the Organisation of Petroleum Exporting Countries (OPEC) production-cut deal to the end of 2018.

“In addition, an overall balance of payments surplus of 2.2 per cent of the gross domestic product (GDP) was recorded in the review quarter”, report stated.

“Consequently, foreign exchange inflow through the CBN stood at $14.71bn, showing an increase of 22.7 per cent and 118.7 per cent over the levels in the preceding quarter and the corresponding period of 2016, respectively.

The increase reflected the rise in receipts from oil and improvement in non-oil proceeds.”

Motolani Oseni

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Dailytimes Staff

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