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Naira firms up at the parallel market, remains weak at interbank

Forex
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Friday, November 04, 2016 3.20 pm / Proshare Markets

Today, Naira depreciated against the Dollar at the interbank FX market by 7.92% to close at N328.50. The Nigerian currency also traded southwards by 0.21% at Parallel Market to close lower at N469.00.

At the end of week,  analysis revealed that the Naira closed with mixed outlook against the dollar in both markets, to appreciate by 0.21% in parallel market but depreciated by 8.01% in interbank FX market as against previous week 3.75% depreciation recorded at the  parallel market and 0.08% appreciation recorded at the interbank market.



The continued sale of dollar to BDCs had played significant role in the modest stability observed recently in both markets. However, speculative tendency and scarcity of FX remain the driving factors depressing the value of the Naira.

Meanwhile, the currency seems to have found its support level around N304.00 and N454.00 at the interbank and parallel markets respectively as trading pattern in both markets had indicated.

So far, post-Flexible FX regime analysis revealed that the Naira had lost 16.69% and 35.94% in value at both interbank and parallel markets respectively as at the end of trading session today. The trading gap or spread between the interbank and parallel market rates contracted to close lower at 42.60% as against 54.35% recorded in previous week.

We would like to maintain our position as indicated by a cursory analysis, using CAGR of 0.46% to put the value of the Naira above N800.00 to a Dollar before the end of the year if the factors driving current scarcity and speculative tendency remain unchanged.

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