Naira Opens New Week Negative Against US Dollar at Official, Black Markets, but There Is Hope of Recovery

• Importers and Nigerians in search of dollars hope the new week will be better at the forex markets
• The Nigerian currency closed the previous week on a negative note against the dollar in official and unofficial foreign exchange markets
• With the dollar wobbling in the international market, the new week is expected to be better for the naira

The naira ended the previous week on Friday, August 23, 2023, at a low against the United States dollar in the official and unofficial forex markets.

The FX markets include the Parallel, Peer-to-Peer (P2P), and Investors and Exporters (I&E), with the latter being the official FX window.

Checks by Legit.ng show the most significant loss happened in the parallel forex market, also known as the black market.

In the parallel market, the naira ended last week with a depreciation to the Dollar by N5 to sell at N915/$1.

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Equally, in the P2P arm of the unofficial forex market used mainly by crypto traders, data shows the Naira lost N4 against the American currency to sell at N915/$1, in contrast to the previous trading day’s N911/$1.

Official market exchange rate

While in the I&E window, Nigerian currency lost N6.73 or 0.78% to trade at N778.42/$1 on Friday, August 23, compared to Thursday’s exchange rate value of N771.69/$1.

This happened as forex transactions in the official window dropped to $73.80 million in the last trading session.

This represents $47.80 million or 39.3% lower than the $121.60 million reported on Thursday.

Also, the CBN data shows that the naira traded flat against the pound Sterling and the Euro on Friday at N976.76/£1 and N504.64/€1, respectively.

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Expectations for the new week

The pressure on forex demand is expected to continue this week, but there are indications that the Central Bank of Nigeria will intervene in the FX markets to bring down the dollar exchange rate at the unofficial markets.

Also, Reuters reports that the dollar eased from a 12-week peak on Friday and is expected to continue in the new week.

Already early morning trade shows, the South African rand edged up against a weaker dollar on Monday, August 28.

This will, however, not happen if the US Federal Reserve decides to increase interest rates this week.

Increasing interest rates often tend to make the dollar stronger against foreign currencies.

CBN announces dollar to naira price verification portal

Meanwhile, in another report, it was revealed that the Central Bank of Nigeria had introduced a new portal that will put an end to malpractices in the foreign exchange market.

The portal is set to go live by the end of August 2023, and it is expected to be a game-changer if done correctly.

Source: Legit.ng