After a prolonged decline in the value against major currencies, Naira value strengthened massively on Tuesday at the parallel market popularly known as the Black market against the U.S Dollar, British Pounds, and Euros due to sell-off by speculators.
On Tuesday, Naira exchanged at the rate of N440.00/$1 at the parallel market, an appreciation of N25 (+5.4%) from its closing rate of N465/$1 on Monday. The rise on Tuesday followed N12 gain in value on Monday from a close of N477/$1 on Friday according to the data on abokiFX.
Similarly, Naira gained against the British Pounds as the exchange rate dropped to N590/£1 on Tuesday from N605/£1 on Monday and N615/£1 on Friday.
Also, Naira rate against the Euro dropped to N542/€1 on Tuesday from N545/€1 on Monday and N555/€1 on Friday.
As the Central Bank of Nigeria (CBN) works towards the unification of exchanges in the country, it has intensified efforts in protecting the value of the Naira.
The CBN in its latest effort to protect the Naira and the foreign reserve, has doubled down on importers, and those who abuse the Form M system, to eliminate over-invoicing, transfer pricing, double handling charges, and avoidable costs.
CBN banned authorized dealers from opening Forms M whose payments are routed through a buying company/agent or any third party.
Also, CBN has threatened sanctions on exporters who fail to repatriate their export proceeds. The apex bank directed banks to submit the names, addresses, and Bank Verification Number (BVN) of all affected exporters according to Nairametrics.
Following the CBN crackdown, speculators are scrambling to sell off hoarded foreign currencies while buyers are being reserved in their purchases due to fear of further Naira strengthening.
However, at the Investors’ and Exporters Window, Naira slightly dropped against the dollar to N386 at the close of trading on Tuesday, despite early appreciation in the opening trade, according to the data on FMDQ.
The high and low exchange rates at the intraday trading are N395.13/$1 and N380/$1 respectively.
The turnover at the I & E Window on Tuesday was $58.46 million.