The foreign exchange market closed on Wednesday with Nigeria’s currency weakened across all market segments.

Traders attributed the Naira depreciation to increased demand due to speculation. The foreign exchange market has been under pressure since March 2020 following a sharp drop in oil prices as a result of the Covid-19 pandemic.

Naira dropped in value by N3 as the dollar traded at an average rate of N486 on Wednesday as against N483 traded on Tuesday.

Investigation shows that in some parts of Lagos, Naira sold for N485, while in some parts of Abuja and Kano it sold for N487.

Godwin Emefiele, governor of the CBN said on Tuesday that the black market is a shallow market of only about five percent of the foreign exchange market which is patronised by people who go there for cash to offer bribes and corruption. Parallel market is the place where people who don’t want to provide documents go, he said.

“At the E& I (Import& Export) Window, the rate is about N386 or N387 / $1. We don’t control the I & E window. Why will anyone use the parallel market to say that the exchange rate is over N480/$1,” Emefiele said.

Related News

The local currency also lost N3 at the end of business on Wednesday at the Bureau De Change (BDC) segment as the dollar sold for N485 compared to N482 on the previous day.

This is in spite of dollar disbursement to BDCs on Tuesday. The BDCs funded their accounts on Wednesday in anticipation of dollar allocation on Thursday by the Central Bank of Nigeria (CBN).

The Apex bank sells $10,000 twice weekly to the BDC segment of the foreign exchange market.

At the Investors and Exporters (I&E) forex market, Naira depreciated significantly by 2.01 percent as the dollar was quoted at N393.25 as against the last close of N385.50.

Analysts at FSDH research noted that most participants maintained bids between N382.00 and N394.83 per dollar.

The foreign exchange daily turnover declined by 68.21 percent to $52.09 million on Wednesday from $163.87 million recorded on Tuesday, data from FMDQ indicated.

More from our Markets Column
Read Next
Untitled design(56)

9Mobile beats other telcos to digital banking race with 9PSB launch

By Frank Eleanya • November 25, 2020

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.

Join BusinessDay whatsapp Channel, to stay up to date

Open In Whatsapp