In the just concluded week, Naira weakened
against the USD at the Investors & Exporters Window as well as the Bureau De Change and Parallel markets by 0.12%, 0.40% and 0.40% respectively to close at N411.75/USD, N500/USD and N505.00/USD respectively.
We saw the FX reserves decline w-o-w by 0.33% to close at USD33.12 billion as at July 9, 2021, despite the sustained increase in crude prices.
Meanwhile, NGN/USD 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: 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.
Naira Weakens against the USD at Most FX Markets
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WeekAheadFX: Naira/USD to stabilize at most FX Windows as crude oil price
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Experts of investment banking are not seeing any respite for the weak Naira in the near term as the Central Bank of Nigeria (CBN) foreign exchange intervention tumble 28% last week.
This is even coming as Nigeria records unfavourable trade position with a trade deficit of around N4.00 trillion in the first quarter of this year due to increased importations despite scarce foreign currency inflow into the economy.
This negative trade position implies an outflow of dollar for the country as the monetary policy authority struggle to keep ailing Naira strong in the currency market.
While current data shows that foreign trade jumps 6% to about N10 trillion, importations accounted for 70% of total international trade in the period.