New Telegraph

Analysts: Naira to remain stable at I&E window

Against the background of increasing pressure on naira at the parallel market, analysts at Financial Derivatives Company (FDC) have predicted that the local currency is likely to remain stable at the Investors and Exporters’ (I&E) FX window, albeit in the short term.

The analysts, who stated this in a recent report, said that their prediction was hinged on higher oil prices boosting the Central Bank of Nigeria (CBN)’s capacity to continue to supply the foreign exchange market. According to the analysts, “(on) outlook in the I&E window, naira is projected to remain relatively stable in the near term, trading between the band of N416.50/$-N417/$, as CBN continue to supply the foreign exchange market following the higher oil prices. However, demand pressure in the parallel market is expected to linger, which will further depreciate the naira.

The naira is projected to trade around N588/$ and N590/$ in the parallel market.” They stated that between April 1 and April 19, rates in the I&E window traded within the band of N416.17/$- N417.00/$, adding that rates in the window averaged N416.75/$, which was 0.06 per cent depreciation from the average rate of N416.50/$ in the first half of March.

In his keynote address at the apex bank-organised seminar for Finance Correspondents and Business Editors held in Akure, last month, CBN Governor, Mr. Godwin Emefiele, attributed the stability of the naira at the I&E window, to the regulator’s discontinuation of FX allocation to Bureaux De Change (BDC) operators. Emefiele, who was represented by the Deputy Governor, Corporate Services, CBN, Mr Edward Adamu, said: “As a result of our demand management policy, the naira has remained largely stable at the I & E window, particularly since the discontinuation of FX allocation to Bureau De Change operators along with the convergence between the CBN and NAFEX rates.

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