The value of the Nigerian naira extended its fall on Friday at the parallel market popularly known as the black market, as well as on the Investors & Exporters Window (I & E Window).
Naira was exchanged at the rate of N465.00 per dollar on Friday. The value declined further by N2.00 compared toN463.00 per dollar it exchanged on Thursday, according to abokiFX.
The scarcity of the dollar in the parallel market amid an improving demand due to reopening of the economy, have been the reason behind the crash according to traders.
Naira value had been stable against the dollar in the parallel market at N461.00 per dollar from 2 July to 8 July 2020. However, its value has depreciated by N4.00 in just 2 days.
British Pounds; similarly, naira value has been dropping against the GBP. In just two days between 8 July and 10 July, naira has lost N7.00 against GBP.
On Friday it was exchanged at the rate of N565.00 per GBP compared to N562.00 per GBP on Thursday and N558.00 on Wednesday at the parallel market.
At the Investors & Exporters Window (I & E Window), although the indicative opening rate on Friday strengthened by 83kobo to N386.13 from N386.96 on Thursday, naira closed weaker on Friday than it did on Thursday.
The naira rate closed at N387.00 per dollar according to the data from FMDQ,. This shows a 50kobo decline in value compared to N386.50 closing rate on Thursday.
The high and low exchange rates at the I & E Window on Friday were N390.00 and N375 respectively.
The daily turnover decreased slightly at the I & E Window to $25.17 million on Friday from $25.19 million recorded on Thursday.
The CBN official rate for the naira according FMDQ stood at N381 per dollar. However, the official rate quoted on the CBN website remains at N360 per dollar.
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The Nigerian naira has been under immense pressure since the slump in oil prices due to low demand as a result of the Coronavirus pandemic.
Although the prices oil has recovered to more than $40 per barrel, it is still below the pre-pandemic levels. Brent crude is trading at $43.33 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.