Nigeria’s currency was stable on Friday as the dollar was trading at N440 on the black market. This was a loss of N5 compared to N435 sold in some areas of Lagos on Thursday.
The ‘wait and watch’ game by traders was still playing out in the market in anticipation of dollar sales by the Central Bank of Nigeria (CBN).
The CBN will on Monday, September 7, 2020 resume dollar sales to Bureau De Change (BDC) operators in the country.
The apex bank on March 26 suspended foreign exchange sales to the Bureau De Change (BDC) operators until further notice due to the Covid-19 lockdown as requested by the operators. The suspension notwithstanding, some BDCs are still active in the market.
BusinessDay gathered that the CBN had since Monday, August 31, 2020 intervened with dollar supply in the market to the tune of $60 million to clear the FX backlog, which is estimated at between $5 billion and $7 billion by FSDH Research.
The CBN’s strategy of a small-but-steady supply of the dollars to local banks in daily tranches of $50mio seems to be having little-to-no effect in stemming the outstanding demand, analysts at Zedcrest Capital Limited said.
Despite improved volumes in the I&E FX window ($98.18mio changed hands Thursday, up 140% D/D), the closing rate weakened by N0.25k to close at N386.25/$.
The foreign exchange market opened with an indicative rate of N386.69k on Friday at the Investors and Exporters (I&E) forex window. This signals N0.21k depreciation over N386.48k opened with on Thursday, data from FMDQ showed.
Daily FX turnover at I&E window rose by 139.68 percent to $92.18 million on Thursday from $38.46 million recorded on Wednesday.
The market closed with naira losing N0.25k as the dollar was quoted at N386.25k on Thursday from N386.00k closed since Tuesday, at the I&E window. Analysts at FSDH said most participants maintained bids between N380.00 and N395.13 per dollar.
The foreign exchange has been under intense pressure since March 2020 following sharp drop in the oil prices due to outbreak of Covid-19.
Nigeria’s currency has lost N108 to the dollar since March 2020 when the dollar was sold at N368/$ to N476 as at August 2020 on the black market, data from BusinessDay Naira monitor indicated.
