Forex Scarcity Pushes Naira Down across Market Segments – THISDAY

By Obinna Chima

The naira depreciated against the United States dollars at all foreign exchange (forex) market segments last week following reports of strain in forex supply, mainly at the interbank market segment

As a result of this, the spot rate of the naira dropped week-on-week against the dollar at the interbank market to an all-time low of N292.25 to a dollar. The naira also depreciated at the Bureau de Change and parallel market segments by 2.9 per cent and 3.13 per cent to N355/$1 and N365/$1  respectively as demand at the interbank market spilled over to the alternative market segments.

This week, analysts at Cowry Assets Management Limited predicted an increased upward pressure on the foreign exchange rate as the central bank prepares to settle its obligations on its 1-month (July 2016) tenor futures contract entered on Monday, 27 June 2016 at the rate of N279/$1. The value of the maturing futures contract was put at $697 million.