Despite the suspension of supply of foreign exchange sales to Bureau De Change (BDCs) by the Central Bank of Nigeria (CBN, the naira strengthened against the dollar at the BDC and parallel markets by 0.98per cent and 1.35per cent last week to close at N505 and N510 respectively.

However, at the Investors & Exporters Foreign Exchange (I & E FX) window, the currency  in its week-on-week (WoW) performance depreciated by 0.01 per cent to close at N411.5 against the dollar from N411.4 4 at which it opened for trading last week.

Analysts believe the speedy appreciation of the local currency against the greenback– which earlier touched N525  after the CBN’s announcement – may have been caused by the expectation of foreign currency inflows from Eurobond issuance of $6.2 billion and the anticipated $3.4 billion Special Drawing Rights (SDRs) from International Monetary Fund (IMF). Naira at the CBN Window last week traded flat at N409.11 against the dollar at buying rate and N410.11 against the dollar at selling rate.

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On the flip side, the naira at the CBN window appreciated by 0.33 per cent to N569.52 against the pound sterling at buying rate in week-on-week (WoW) performance from N571.39 against the Pound sterling in prior week’s trading, and also gained 0.69 per cent to N483.04 against the euro at buying rate prior’s week exchange rate transaction. It was learnt that the CBN injected $210 million into the foreign exchange market with a breakdown of $100 million allocated to Wholesale Secondary Market Intervention Sales (SMIS), $55 million was allocated to Small and Medium Scale Enterprises and $55 million was sold for invisibles.

Despite the CBN intervention, the foreign reserves increased to $33.57billion as at August 5, 2021 from $33.40billion it closed in June.

Reacting, analysts at Cowry Assets Limited noted that, “In the new week, on the back of the anticipated dollar inflow and recent accretion to the external reserves – foreign exchange reserves rose w-o-w by 0.48per cent to close at $33.5 billion –, we expect Naira to further strengthen against the Greenback at most foreign reserves segments, especially at the parallel market.”