Naira depreciates to 367.88/$1 at I&E FX window

The Nigerian currency, Naira, on Monday, depreciated further to 367.88 per US dollar against 367.60 traded on Friday, shedding 0.07 per cent on the Investor &Exporter FX widow.

The Naira, however, appreciated by points to close at the end of yesterday trading at 422 against 424 traded on Friday.

Although, the naira, had depreciated within last week by N1.23 at I&E window, closing last week trading at N367.60 to the dollar, compared to N366.37 exchanged the previous week.

The window, at the end of yesterday trading activities recode4d a daily turnover of $53.24 million, the same figure sold on Friday, latest data from the FMDQ OTC website has revealed.

The local currency at the parallel market, however, stabilised at 364 to a dollar and remained unchanged at 474 per Pound sterling, maintaining the same rate they were sold on Friday.

Meanwhile, there are indications that naira’s depreciation in the I&E window is being driven by a combination of two factors.

The first factor is demand by investors and exporters for what they consider a fair exchange rate and increased demand for dollars in the market.

Except the CBN intervenes, this trend is expected to persist this week; and thus further push up the indicative exchange rate for the window.

Two weeks ago, the naira depreciated by N3.54 in the window, while the volume of dollars traded in the window shot up by 304 per cent last week to $1.04b from $257m the previous week.

The apex on Friday, intervened for the second time in the week under review with the total sum of $462.336 million, putting the total figure released within the week to $657.3m.

Meanwhile, the interbank money market, will, this week, receive liquidity boost of N966b inflow from statutory allocation funds and payment of matured treasury bills (TBs). The expected inflow will revive market liquidity, which fell drastically last week by 92 per cent to N12 b, on Friday, from N177.48b on Monday.

The decline in liquidity was occasioned by outflow of N337.32b through TBs as well as outflow to fund participation in dollar sales by the Central Bank of Nigeria (CBN). These outflows cancelled the impact of N152b inflow from payment of matured TBs.

This development caused cost of funds to shot up between Monday and Tuesday before moderating downward in the second half of the week.
However, data from the Financial Market Dealers Quote (FMDQ) showed the interest rate on Collateralised lending rose from 14 per cent the previous week to 18.33 per cent on Tuesday, but dropped to 5.0 per cent at the close of business on Friday.
Similarly interest rate on Overnight lending rose from 14.92 per cent the previous week to 19.17 per cent on Tuesday but dropped to 5.83 per cent at the end of last week.