In line with our expectations, Naira depreciated further at the Investors and Exporters FX Window (I&E FXW) by 0.39% to close at N383.00/USD as crude oil prices, especially bonny light which fell further to a new low of USD21.41 per barrel on Thursday, April 2, 2020. Similarly, Naira depreciated further against USD at the Bureau De Change and the parallel (“black”) markets by 2.53% and 1.22% respectively to close at N405/USD and N415.00/USD respectively.
However, NGN/USD closed flat at the Interbank Foreign Exchange market, at N358.51/USD amid weekly injections of USD210 million by CBN into the foreign exchange 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 invisible.
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Elsewhere, the Naira/USD exchange rate rose (i.e Naira depreciated) for most of the foreign exchange forward contracts: 2 months, 3 months, 6 months and 12 months rates appreciated by 0.24%, 0.53%, 1.48% and 3.01% respectively to close at N389.64/USD, N393.11/USD, N405.79/USD and N435.26/USD respectively.
However, forward contract for 1 month depreciated by 0.08% to close at N386.32/USD; while spot rate remained flattish at N361.00/USD.
In the new week, we expect depreciation of the Naira against the USD across the market segments amid lower crude oil prices.
Cowry Asset Management