By Abiola Olawale
The naira last week depreciated in both the parallel market and the Investors and Exporters (I&E) window, following the recent decline in the nation’s external reserves.
Nigeria, last week recorded a decline in its external reserves by $279 million, subsequently naira depreciated in the parallel market.
Data coming from the Central Bank of Nigeria (CBN), revealed that the external reserves fell to $36.116 billion from $36.395 billion which was the external reserves a week earlier. This is the second weekly decline recorded since December 17th when the country recorded a decline in its reserves.
The FMDQ, last week released a data which indicated that Naira depreciated by N2.04 in the I&E window and by 30 kobo in the parallel market last week.
The data from FMDQ, indicated that exchange rate on the I&E window rose to N396.17 per dollar last week from N394.13 per dollar the previous week.
On the parallel market, the exchange rate rose to N477 per dollar last week from the N476.7 per dollar, which was the exchange rate for the previous week, according to the data from naijabdcs.com, a live exchange rate platform of the Association of Bureaux De Change Operators of Nigeria (ABCON).
While reacting, Bismarck Rewane, Chief Executive Officer of Financial Derivatives Company, predicted that there will be a persist till next month due to rising currency pressure.
Rewane, who is also a member of the Presidential Economic Advisory Council, gave his predictions while speaking at the monthly Lagos Business School Breakfast series.
In his words, “Currency pressures will persist at both parallel market and I & E window on increased forex demand, increasing the likelihood of another currency adjustment to keep the I&E window & official exchange rates closer. Oil prices rose by 11% to $59 per barrel, year-to-date, ytd, while external reserves are down by 0.88% or $320 million to $36.2 billion since Jan 26. Based on this, the exchange rate (IEFX) could weaken to between N400 per dollar and N410 per dollar by March”.
