Festive spend­ing, elec­tion to ex­ert forex de­mand pres­sure as FX re­serves take the hit

Business a.m. - - FINANCE & INVESTMENT -

MANUFAC TURERS HAVE COM­MENCED IN­VEN­TORY build-up for festive sales and customers have be­gun to pre­pare for the fes­tiv­i­ties, this cou­pled with elec­tion spend­ing could trig­ger forex de­mand pres­sures, ac­cord­ing to an­a­lysts.

Al­ready, the coun­try’s FX re­serve de­clined for the fourth month in a row to Oc­to­ber, drop­ping $2.2 bil­lion in Oc­to­ber alone.

In­for­ma­tion from the Cen­tral Bank of Nige­ria (CBN) shows that the re­serves shed $2.2 bil­lion in Oc­to­ber, mov­ing from $44.3 bil­lion on SepOCTOBER tem­ber 30 to $42 bil­lion by Oc­to­ber 30, 2018.

The coun­try’s for­eign re­serves, which swelled steadily in 2018, fol­low­ing im­proved oil prices, and hit­ting $47.8 bil­lion in June, be­gan plung­ing down­wards sud­denly, fol­low­ing the nu­mer­ous in­ter­ven­tions of the CBN in a bid to keep the naira sta­ble.

The naira re­mained flat at N362 in the par­al­lel mar­ket.

A busi­ness a.m. sur­vey of street mar­kets in Ikeja, showed sim­i­lar trad­ing the dol­lar was sold at N361/ N362 through­out the week and was bought at N360 per dol­lar, the Bri­tish pound ster­ling and euro sold at N470 and N412 re­spec­tively, com­pared to N480 and N420 from the close of the pre­vi­ous week.

At the Bureau De Change (BDC) win­dow, the Naira also traded sta­ble at N360 to the dol­lar and was bought at N359, while the Pound Ster­ling and Euro closed at N472 and N416 re­spec­tively as traders bought the pounds at N462 and the Euro at N406.

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