Naira Continues Free Fall at the Official Exchange, Despite Improved FX Supply
- Nigeria's local currency, the naira has continued to depreciate both at the official and exchange markets
- It traded at N420 per dollar on Tuesday, May 31 2022 as against the N419.5 it did on Monday, May 30, 2022
- Nigeria’s external reserve went down by 0.07 per cent on Friday, May 27, 2022, standing at $38.54 billion from $38.57 billion recorded the day before
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The Nigerian currency, the naira has continued its free fall in both the official and parallel markets, closing at N420.25 at the Investors and Exporters (I&E) window.
The country’s exchange rate began the week on a negative note as the naira went down against the dollar by 0.18 to close at N420 per dollar compared to 419.5 per dollar recorded at the end of last week.
Source: Getty Images
Naira fluctuating at both the official and black markets
This is despite the 13.97 per cent spike in the forex turnover as $122.91 million were traded in the market.
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However, the exchange rate at the parallel market saw a slight improvement which gained 0.01 per cent to trade at N605.94 on the morning of Tuesday, May 31, 2022, as against the N606 per dollar seen at the same time on Monday, May 30, 2022.
Also, the naira slightly firmed up against the dollar on Monday, May 30, 2022, exchanging at N608 per dollar which represents a 0.33 per cent appreciation in comparison to N640 per dollar recorded as of the previous trading session, according to data from the operators of Bureau de Change in Nigeria.
External reserve also down
Nairametrics reports that Nigeria’s external reserve went down by 0.07 per cent on Friday, May 27, 2022, standing at $38.54 billion from $38.57 billion recorded the day before.
The decrease in the country’s external reserve level is due to the incessant intervention of the Central Bank of Nigeria (CBN) in the FX market so as to ensure the stability of the naira.
AbokiFX and Emefiele's battle to stabilise the naira
On September 2021, TheCable reported that Godwin Emefiele, the governor of the CBN, made it clear that the monetary policy team he leads wants to shut down speculative trading of foreign exchange at the parallel market. Emefiele has shown this in more ways than one. But the latest way is by pushing for a crackdown on abokiFX, a website that publishes daily parallel market rates.
Naira depreciates at black market, official channel after CBN devaluation
Legit.ng reported that the naira became weaker against dollar after it depreciated by N6 to settle at N493 to one dollar, against the N487/$1 the black market closed with on Tuesday.
This is the weakest naira has sold in the last six months. Tuesday's parallel market price had broke this low level when naira hit N487 to a dollar, as seen on AbokiFX data.
According to FMDQ, the official exchange rate closed at N411.50 on the investors & exporters window for $1, showing a depreciation in naira value when compared to the N411.38 for one dollar it opened the market with.
Source: Legit.ng
