Reporting This Week’s Currencies Around the World

Foreign Investors Are Calculating Their Own Forex Rate in Nigeria

Due to a chronic dollar shortage, the naira trades at an official and a much lower parallel rate. Correspondingly, foreign investors are using their calculations to value their ambushed Nigerian holdings.

Pricing for two stocks listed in Lagos and London, Airtel Africa Plc and Seplat Energy Plc, is used to create one alternative level. According to Altree Capital Ltd. portfolio manager Jenny Chamberlain, the results provide a realistic assessment of the potential for a sell-off in the Nigerian stock market.

The rate at which the naira has fallen against the dollar this year has been just about 4%. Many international portfolio managers hope to repatriate money from Nigeria. This is due to a lack of hard currency unable to do so. According to the International Monetary Fund, Africa’s largest economy may hold up to $1.7B in investor money.

The parallel market has the dollar freely traded but at a premium of over 80% to the official spot rate. It is more likely to provide dollars to many businesses and investors. The parallel-market rate was 793 per dollar on Thursday, while the naira traded just below 444 a dollar.

Baht’s Rally Should Stall without The Chinese Coming Back

Chinese Tourists may appear as the new catalysts. Without them, the rally in the Thai baht may be nearing an end, according to technical indicators. The Thai baht has gained nearly 6% against the dollar in the past month as China eases curbs on the koruna, and investors bet the Fed will slow the rate hikes. It was Asia’s second-best-performing currency. According to figures released on Monday, the third-quarter gross domestic product grew by 4.5% from a year ago. This indicated that the economy is continuing to expand.

Slow stochastic is a momentum indicator. According to it, the currency has moved into the overbought territory from the oversold two months ago. Resistance will also likely impede the stock’s progress, especially at its 200-day moving average and around its August high of 35.057.

The Bank of Thailand’s declaration will not maintain a gradual tightening trend. The tourism-dependent currency needs new stimulus to reach higher levels. Officials and state media in China have downplayed expectations for a quick reopening. Yet the government indicates that some COVID-Zero norms have been relaxed. Before the pandemic, tourism accounted for roughly a fifth of Thailand’s economy, with Chinese visitors accounting for 28% of the total.