Reflecting apprehension over the continued decline in the nation’s external reserves, especially among FPIs, the Naira suffered its first depreciation in seven weeks in the Investors and Exporters (I&E) window last week.
Data from FMDQ showed that the indicative exchange rate of the window rose to N362.77 per dollar last week from N362.02 per dollar the previous week, translating to 77 kobo depreciation.
Prior to last week, the Naira appreciated persistently against the dollar for six weeks, when the I&E window exchange rate dropped from N363.44 per dollar on August 9th to N362.02 on September 27th.
The resulting N1.42 appreciation was fuelled by increased dollar sales by the CBN in the I&E window in a bid to reverse the N2.65 depreciation suffered by the Naira against the dollar between July 12th and August 15th, when the I&E window rose to N363.44 per dollar from N360.79 per dollar, due to increased dollar demand by FPI exiting the nation’s fixed income market.
The depreciation suffered by the Naira last week, according to analysts at Lagos based Cowry Assets Management Company, will persist this week, citing apprehension over declining external reserves. “In the new week, we expect depreciation of the Naira against the dollar across the market segments amid decreasing external reserves”, they said.