Naira sustains gains, steady at all FX segments during holidays

The Nigerian currency, Naira, on Monday, October 2nd, remained unchanged at all the foreign exchange markets and segments during the holiday marking the nation’s 57th Independence Day.

However, at the parallel market, the local currency, over the weekend, extended till yesterday sustained the appreciated gains at the parallel segment of the forex market, stood steadied at 365 to the dollar, better than 367 sold the previous week.

The Naira was also seen at 485 to the pound against 467 sold a month ago during the Ileya holiday celebration, but the unchanged rate of 425 per Euro, was better than 432 exchanged during the same period.

Due to the Federal Government’s declaration of Monday as public holiday for the celebration, the market was expected to open today Tuesday, October 3 , as the official forex market remained flat at an un-operated rate of 305.75 compared to 305.85 per dollar sold a month ago.

Going by the rate closed at the last trading day of the week, the NAFEX window stood at 360.40 against 359.67 per dollar traded the last holiday given for the Islamic celebration.

It would be recalled that the Central Bank of Nigeria (CBN), in its proactive measure, had lifted the forex market on Friday, with fresh injection of $308.5million. This move is expected to further ensure liquidity and stability in the FX market.

The apex bank, also, about a week ago had injected $195m ahead of MPC decisions, which was offered in three segments of the market. In the wholesale Secondary Market Intervention Sales (SMIS) of the inter-bank Foreign Exchange market,

it auctioned $100m and also intervened in the Small and Medium Enterprises (SMEs) and invisible segments, with the sum of $50m and $45m, respectively. This brings the total intervention for the week to a sum of $503.5m.

Consequently, forex dealers believed with the latest balance of the nation’s external reserves, the apex bank is better positioned in its drive to ensuring foreign exchange rate convergence.

However, the figure obtained from the central bank showed that its foreign external reserves stood at $32.16 billion as at September 22, 2017, indicating a total gain of $7.41bn in the last 12 months.

The latest apex bank statistic showed that as at September 22, 2016, the external reserves stood at $24.75bn against the current $32.16bn, hence, representing an appreciation of over seven billion dollar in just one year.

However, the reserves figure was seen at $31.8bn a month ago, exactly August 28, 2017, but strengthened by $361.6m within one month to record new figure of $32.16bn, therefore, representing the highest balance since January 2015.

Although, the external reserve has staged a rebound since early 2017 after hitting a post election low of about $23.6bn back in October 31, 2016 (using adjusted data). The external reserves dropped below $30bn in February, 2015, just before the 2015 General Elections.