Stocks, naira likely to rebounce after CBN FX interventions
Stock market indices may likely rebounce back as investors are hopeful that the intervention of about $700 dollars last week by the Central Bank at the interbank market will ease the forex scarcity in the market segment.
The CBN also on Friday opened special window for the Bureau de Change operators by allowing them to buy forex from the international money transfers operators.
Forex scarcity had forced the overnight lending rate to jump almost 40 per cent from 18 per cent last week which forced the naira to N330/$ as at Friday. The pressure also saw the naira depreciate to N378 to a dollar on the parallel market.
With the two interventions and the Monetary Policy Committee meeting this week which may likely access the new flexible exchange rate initiative, the value of the local currency may appreciate.
Speaking to Daily Trust yesterday, acting president of the Association of Bureau De Change operators, Aminu Gwadabe, said the opening of the window for the foreign transfer sale to his members is a welcome development and may likely inject liquidity in the market if well handled.
He said the continued downfall of the naira was due to the scarcity and that more and more people were now demanding for the forex because there it is no longer safe to keep naira especially for the intending travellers.
“We hope the banks will implement the policy, because it’s not enough for the CBN to announce it but to ensure that the banks implement it,” Gwadabe said
Meanwhile, the Nigerian Stock Exchange (NSE) ended last week on a negative note as the all-share index (ASI) and market capitalisation declined 3.98 percent for the fourth consecutive week to close at 27,659.44 points and N9.500 trillion respectively.
“Similarly, all other indices finished lower during the week, with the exception of the NSE Consumer Goods Index that gained 0.89 percent, while the NSE ASeM Index closed flat,” according to the NSE’s weekly stock market report.