Friday, October 07, 2016 3.20 pm / TheAnalyst
Today Naira appreciated modestly against Dollar in parallel FX market by 0.42% to close at N473.00, but depreciated in interbank FX Market by 0.01% to close at N306.75.
However, in the current week Naira appreciated in value by 1.56% at interbank FX Market and closed flat in parallel market as against 1.05% and 6.29% depreciation recorded in previous week from both markets respectively.
Speculative tendency and scarcity of FX remain the driving factors depressing the value of Naira, while the currency is yet to find its support level as trading activities had indicated in both markets.
Post Flexible FX regime analysis revealed that Naira had lost 8.83% in value in interbank FX Market as at end of trading session today. The trading gap or spread between the interbank and parallel market had widened further by 54.20%
A cursory analysis using CAGR of 0.46% puts the value of Naira above N800.00 against a Dollar before end of year if the factors that are drive current scarcity and speculation remain unchanged.
1. Scarcity Hits Parallel Market Due to High FX Demand