Naira holds ground against Dollar in both markets

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Friday, October 21, 2016 3.20 pm / TheAnalyst 

Today Naira appreciated against Dollar in parallel FX market by 0.22% to close at N453.00, but traded flat at interbank FX Market to close at N304.75.

Also, end of the week analysis revealed Naira holding ground against dollar in both markets, to appreciate by 1.31% in parallel market and by 0.98% in interbank FX market as against 2.96% appreciation recorded in parallel market and 0.33% depreciation recorded in interbank market.

The continued sale of dollar to BDCs had played significant role in new trading pattern observed in the week. However, 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.

So far, post Flexible FX regime analysis revealed that Naira had lost 8.12% and 31.30% in value at both interbank and parallel markets respectively as at end of trading session today. The trading gap or spread between the interbank and parallel market sheds weight to close lower at 48.65% as against 49.14% 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 Naira above N800.00 against a Dollar before end of year if the factors that are driving current scarcity and speculative tendency remain unchanged.

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