Foreign Exchange Review and Outlook

The foreign exchange market continues to enjoy relative stability as observed in recent weeks, though the spread between the official/interbank and the BDC/Parallel market rates remains staggering. However, consensus opinion remains that the current stability is artificial, bearing in mind the Apex Bank’s decision to remain mute on the policy direction of the foreign exchange market.

Accordingly, Naira/Dollar exchange rate at the CBN and interbank remained at N197.00/US$1 and N199.50/US$1.00 respectively. At the BDC segment, FX traded at N320/US$1.00 on all trading days of the week while Parallel market rate  traded at N322/US$1 on all trading days save for Tuesday when it declined marginally to N323/US$1.00. In the week ahead, whilst the spread between the official and parallel market rates remains, we do not expect any sharp rates volatility to occur