“There Is a Need”: Expert Speaks As Banks, Traders Sell Dollar at New Exchange Rate As Naira Weakens

• The naira has again weakened against the United States dollar and other foreign currencies in all forex markets
• Checks show that the naira's value dropped by 1.69% against the dollar in the official market and by N5 in the unofficial market
• Aminu Gwadabe, the president of ABCON, told Legit.ng what CBN must do to stop naira's free fall in FX markets

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Nigerian naira has recorded another depreciation against the US dollar in the official and unofficial markets.

In the official market, data from FMDQ securities showed that the naira weakened in the Nigerian Autonomous Foreign Exchange Market (NAFEM) to N1,596/$1 on Monday, August 26, 2024.

The new rate represents a 1.69% or N26.46 fall of the naira compared to Friday's exchange rate of N1,570.14/$1.

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The naira depreciated amid fresh concerns about the dollar supply.

Checks by Legit.ng showed that forex supply in the official market depreciated by 14.8% or $17.88 million to $102.93 million from the preceding session's $120.81 million.

Naira against pound, euro

It was a similar story for the naira against the British pound and the euro.

CBN data showed that the naira weakened against the pound sterling in the official market by N7.76 to close at N2,094.81/£1 compared to the previous rate of N2,087.11/£1.

Further findings revealed that against the euro, the naira fell by N1.09 to settle at N1,771.09/€1 from the previous rate of N1,770.74/€1.

Naira to dollar at black market

The naira's story was the same in the black foreign exchange market, also known as the parallel market.

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On Monday, the naira lost N5 against the US dollar as traders quoted an N1,610/$1 selling rate in contrast to the previous session's rate of N1,605/$1.

Speaking to Legit.ng about the naira's performance, Aminu Gwadabe, the president of the Association of Bureaux De Change Operators of Nigeria (ABCON), said that the CBN should shift its focus from demand measures to supply measures.

He called on the apex bank to make available forex to BDCs to ease the pressure on demand.

"There is also a need for alignment of monetary and fiscal policies. The CBN has remained resolute in its mix of interest rate and FX interventions to create liquidity in the market, but there is a need for serious improvements in engaging and collaborating with critical stakeholders.

"Some of the CBN policies affecting the BDCs appear to be inhibitive and dissuasive, weakening confidence and leading to unintended market distortions."

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Traders quote new rates as naira strengthens against British pound, euro

CBN sells dollars to BDC operators

Earlier, Legit.ng reported that the Central Bank of Nigeria conducted another round of dollar sales to licensed Bureau De Change operators.

The sale was a key element of the central bank's strategy to ensure sufficient liquidity in the market and stabilize the currency.

The CBN also fixed an exchange rate limit for the BDCs when selling to Nigerians seeking dollars.

Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.

Source: Legit.ng