Business Naira Watch: Tracking Nigeria's Currency [Day 1]

[ProfRem]

Naira weakens to 24% to 260 against United States Dollar as of 11.06am in Lagos, commercial capital as Central Bank of Nigeria allows currency to trade freely, according to a data gathered from the Bloomberg terminal.

Earlier the Naira weakened to N253 to a dollar as the operation of the inter bank market started.



NOTE:

• Interbank Market

The interbank market is the top-level foreign exchange market where banks exchange different currencies.
The banks can either deal with one another directly, or through electronic brokering platforms such as Thomson Reuters Dealing announced by the CBN.
The three main constituents of the interbank market are:

• spot market – immediate delivery price
• forward market - informal over-the-counter financial market by which contracts for future delivery are entered into
• SWIFT - society or network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment.

• Naira-dollar 3-month non-deliverable forwards rise 3.1% to 330, set for highest on record

The currency rose on outright forward or futures contract in which counterparties settle the difference between the contracted NDF rate and the prevailing spot price.

• NOTE: Nigeria’s Naira Slumps as 15-Month Currency Peg Ends in Lagos

Naira slumps to 260/Dollar as the CBN ends fixed exchange rate policy

• NOTE: Naira spot price pegged at 197-199 since March 2015

The CBN has pegged the official price at 197 - 1999 since march 2015

• Reserves at $26.4b on June 16, -9% vs end-2015 according to NBS data.

The country's reserves contracted to less 9% in June 2016 according to the Nigerian bureau of Statistics.


- Stay tuned for tracking ....