Naira closes flat at N385.50 in I&E FX window

At the end of official trading activities at the Investors & Exporters (I & E) Foreign Exchange window on Tuesday, the Naira closed flat at N385.50 to the US Dollar.

The Nigerian local currency, however, lost by 1.58per cent and 1.38 percent against the Euro and Pound to close at N453.12 and N503.71 respectively, at the specialized window for investors & exporters.

FMDQ Group on its official website said a total turnover of $31.96 million was traded at the I & E FX window by investors.

At the parallel market, while the Naira remained flat against the Dollar to close at N475, it declined by 0.83per cent against the Pound to close at N605. The local currency against the Euro, the Naira gained 0.36 percent to print at N548.

“Going forward, we expect the FX market to be dictated by heightened dollar demand and CBN FX policies,” analysts at InvestementOne research explained.

They explained that “Money market rates were mixed today as Open buy back decreased by eight basis points to 5.17 percent, while Overnight rates increased by four basis points to 6.17per cent.

The bond market was mostly negative today, as yields increased particularly at the short end of the curve.

“We witnessed the yields on the 5yr and 7yr benchmark bonds increase by 89 basis points and 24 basis points to close at 6.74 percent and 7.82 percent respectively, while the yield on the 10yr benchmark bond was flat at 9.08per cent.

“In the near term, we expect market activity to be influenced by liquidity levels and foreign investor participation,” InvestementOne research explained.

Coronation Research explained that “In the absence of significant supply of dollars from the CBN to the NAFEX market (which was designed, in any case, to be autonomous and not require CBN support), NAFEX turnover fell in mid-March and remains low.

“So we would expect demand for dollars to hit the parallel market, driving down the unofficial price of the Naira.

“It has, indeed, but not very much. If we look back to early 2017  the parallel rate was a long way from the interbank market (there was no NAFEX market at the time) – 50.9per cent weaker, to be precise.

“Towards the end of last week, the parallel market rate was 22.9 percent shy of the NAFEX rate, much less of a difference.”