• Tuesday, April 23, 2024
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Here’s how naira closed week at official, parallel market

Dollar nears N2,000 on black market as scarcity worsens

Trading at Nigeria’s foreign exchange market closed on Friday with Naira appreciating marginally by 0.28 percent or N1.21/$1.00 Week-on-Week (W/W) at the official window, also known as the Investors and Exporters (I&E) forex window.

A report by Afrinvest Securities Limited showed that Naira closed the week at N420.13/$1.00 from N421.33/$1.00 previously.

Though the local currency also closed the week by losing 0.82 percent (N5/$) w/w to N614.00/$1.00 from N609.00/$1.00 at the parallel market, popularly known as black market.

On a daily basis on Friday, Naira weakened against the dollar by closing at N615/$, the lowest ever.

Activity level in the I&E window rose 8.2 percent w/w to $520.8 million, the report noted.

Nigeria’s external reserves rose 0.56 percent w/w to $38.8billion as of June 22, 2022 from $38.6billion in the prior week.

Africa’s largest economy’s foreign exchange reserves, which opened the year 2022 at $40.5 billion, have declined to $3.588 billion as of June 23, 2022, data from the Central Bank of Nigeria (CBN) show.

Read also: Naira falls to N615 as dollar scarcity hits FX markets

Since the approval of the $3.35 billion Special Drawing Rights (SDRs) by the IMF in August 2021 and the issuance of Eurobond in September, external reserves have trended downwards, according to the first quarter economic report by FSDH Research, an arm of FSDH Holding Company Limited.

Lower oil production below the budgeted benchmark despite high crude oil price led to limited foreign currency inflows needed to boost the reserves.

At the FMDQ Securities Exchange (SE) FX Contract Market, the total value of open contracts rose 0.8percent w/w ($31.7million) to settle at $3.9billion.

The June 2023 instrument (contract price: N448.59) received the most buying interest with additional subscription of $28.5million which raised the total value to $48.1million.

The economy recorded lower net foreign exchange inflow in January, driven, mainly, by net flows from the CBN and autonomous sources, the CBN’s economic report for January 2022 said.

According to the report, Aggregate foreign exchange inflow into the economy declined by 36.7 per cent to $4.36 billion in January 2022, from $6.89 billion in December 2021.

The total foreign exchange outflow decreased by 5.1 per cent to $3.41 billion, from $3.59 billion in the preceding period. A net inflow of $0.95 billion was recorded in the month under review, compared with net inflow of $3.29 billion in the preceding period.

Further analysis shows that foreign exchange inflow into the Central Bank fell by 36.7 percent to $1.82 billion from $2.88 billion, attributed to 45.4 per cent decline in non-oil components, mainly, Single Treasury Account (TSA) and third-party receipts/Ministries, Departments and Agencies (MDA) transfers, other official receipts and swaps. Autonomous inflow also decreased by 36.7 per cent to $2.54 billion, from $4.01 billion, due to reduction in invisible purchases.