Naira loses at parallel market as capital inflows hit $4.2bn in Q3

The Naira, on the second trading day of the week suffered a significant setback at the parallel market segment of the foreign exchange market, with closing rates of Pound sterling and the Euro at 480 against 475 traded on Monday and 430 to the Euro, compared to 425 exchanged the same period.

This is just as the National Bureau of Statistics (NBS) had reported that the total value of capital imported into Nigeria stood at $4.15 billion in the third quarter (Q3) of 2017, even though the Africa’s largest economy had exited its worst recession in the last 25 years.

However, the local currency sustained gained point recorded at the official forex market against the US Dollar to close at 305.80, the same rate it sold on Monday but better than 305.85 traded on Friday and stronger than 305.90 sold the previous day.

Also, the Investor & Exporter FX window, declared an appreciable open rate of 359.72 to the Dollar, which was stronger than 359.93 recorded on the previous day but dropped to close at 360.32 weaker than 360.32 on Monday and 360.25 sold last Friday.

But the I&E FX window, put up a better fight to recorded significant increased in the transactions turnover of $227.73 million against $179.78 million exchanged on Monday, which was the same figure recorded on Friday. Nevertheless, the Nigeria’s economy grew in the second quarter, climbing out of its first recession in 25 years, as oil revenues rose, with the apex bank issued various FX policies in ensuring stronger local currency.

The NBS said capital imports were over $4 billion in the third quarter, the first such quarterly rise since 2015, just before the economy tipped into a recession. The rise was driven by portfolio and other investments, it said in a report.

“Shares recorded the largest amount of capital imported in Q3 2017, closely followed by servicing and production sectors,” the statistics office said. Britain and the United States were among the top 10 sources of imported capital, the statistics office said.

Capital imports fell to $5.12 billion last year after reaching $9.64 billion in 2015. Meanwhile, the Africa’s largest economy has concluded plans to raise N117.17 billion worth of treasury bills at an auction on Nov 29, traders said on Tuesday.

The auction, which will be sold through the Central Bank of Nigeria (CBN), plans to offer 26.14 billion naira in three-month paper, 11 billion naira in six-month bill and 80.03 billion naira in one-year note. Results of the auction will be announced next day.

It is however, worth of notes that the apex lender issues treasury bills twice a month to help the government to finance its budget deficit, curb money supply growth and provide an avenue for lenders to manage liquidity.