Naira Depreciates As Dollar Supply Drops by 86% After CBN Lifts Forex Restriction on 43 Items
- Despite an increase in dollar supply, Nigerian currency lost more of its value against the dollar at the official market
- However, it was a different story in the unofficial markets as the naira exchange rate to the dollar remained unchanged
- The CBN is hoping that the readmission of 43 items into the official market for dollar access will help in the coming days
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Naira again depreciated against the US dollar at the investor's and exporters' window of the official foreign exchange market.
According to data from FMDQ securities, naira closed at the I&E window at N764 a dollar on Friday, October 12, 2023.
Source: Getty Images
This represents a 0.63% depreciation in value for Naira compared to the exchange rate of N764.86/$ reported on Thursday, October 12, 2023.
This happened as forex trades at the I&E window plunged by 86.99% to $53.02 million on Friday from $407.66 million reported on Thursday.
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Naira's poor performance comes a day after the CBN announcement to readmit 43 banned items to the official market
The apex bank also promised to intervene in the forex market from time to time in order to ensure price stability.
Naira to dollar exchange rate at black market
In the unofficial parallel window and the Peer-to-Peer (P2P) foreign exchange rate markets, the Naira recorded a poor performance against the US Dollar.
In the P2P window, which Fintechs mostly use, the Naira depreciated against the US Dollar, selling at N1,044/$, compared to the previous day's rate of N1,041/$.
However, in the black market, the value of the Naira against the US Dollar remained unchanged, closing at N1,050/$, the same rate quoted on Thursday.
Naira exchange rate against Pounds and Euro
Data obtained from the CBN website shows that the Naira closed the week at N931.13/£1 against the Pound Sterling and N805.14/€1 against the Euro.
In the black market, one Pound Sterling is selling at N1,275/£1, while the Naira is exchanged at N1,095/€1 against the Euro.
Naira falls to its lowest level in history against the US dollar
Legit.ng earlier reported that the Naira again plunged to new lows on the parallel market, causing more headaches for the new CBN team.
The new team is expected to meet next week for their first monetary policy meeting and is expected to create a clear direction for the forex market.
Source: Legit.ng
