The value of the Nigerian Naira dropped against the dollar at Investors’ & Exporters’ FX Window on Thursday, compared the exchange rate on Wednesday as the market turnover skyrocketed. Whereas at the Parallel Market, although the exchange rate remained stable against the dollar, naira lost value against the British Pounds.
At the Investors’ & Exporters’ Window; Naira was exchange at the rate of N388.00 per dollar at the close of trading on Thursday. This is a N1.50 loss in value compared to a closing rate of N386.50 per dollar on Wednesday according to the data on FMDQ
The turnover at the window jumped by a whooping 445.86% to $102.13 million from $18.71 million recorded on Wednesday.
The CBN official rate for the naira remains at N381.00 per dollar at FMDQ. However, the official rate quoted on the CBN website is still unchanged at N360.00 per dollar.
At the Parallel Market; The exchange rate was stable against the dollar at N470 per dollar, same rate as Wednesday, however, it changed against the British Pounds according to abokiFX.
Naira lost N6.00 in value against the GBP as it exchanged at the rate of N576 per GBP on Thursday in contrast to N570 recorded on Wednesday.
On Thursday, President Muhammadu Buhari presided over the virtual launch of Gold Purchase Programme at the State House, Abuja under the Presidential Artisanal Gold Mining Development Initiative (PAGMI).
According to the Presidency, the PAGMI initiative will add $500 Million to Nigerian foreign reserves annually. The Nigerian foreign reserve has been the anchor for CBN’s effort to sustain the naira, and avert the crushing effect of low foreign exchange earnings on the value of naira.
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Due to Nigeria’s high dependency on oil revenue, naira has been under immense pressure since the slump in oil prices due to low demand as a result of the Coronavirus pandemic.
The prices of oil has however recovered due to supply cuts agreed by OPEC and improving demand, however it is still below the pre-pandemic levels. Brent crude is trading at $42.99 per barrel at the time of this report.
In it’s effort to avert a free fall in the value of Naira, the Central Bank of Nigeria (CBN) in March “technically devalued Naira” and also maintained it’s forex intervention in the foreign exchange market.
The technical devaluation saw the I & E Window rate move from N360/$1 to N380.2/$1 while the official exchange rate moved from N306/$1 to N360/$1.
The central bank last month said it will work towards the gradual unification of exchange rates across all forex windows.
Central bank of Nigeria (CBN) announcement that it has added maize/corn to list of items excluded from official forex market.