The foreign exchange trading week ended on Friday with the Naira depreciating by 0.12 percent against the dollar at the official market, the lowest since March 2021 due to low liquidity.
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Naira closed at N412.00k per dollar on Friday, the same rate quoted on March 9, 2021. This is lower than N411.50k quoted at the beginning of the trading week on Monday, data compiled by BusinessDay from the FMDQ indicated.
The foreign exchange daily turnover declined by 19.55 percent to $89.72 million on Friday compared to $111.53 million recorded on Monday.
On the black market, Naira weakened by 0.20 to close at N485 on Friday as against N484 it stood since Friday last week.
Similarly, Naira lost 0.20 percent to the dollar on Friday to N483/$ from N482/$ since April 24, 2021, at the Bureau De Change (BDC) segment of the market.
“We expect the exchange rates to remain range-bound at the various markets in the coming week,” analysts at Afrinvest Securities Limited said.
Oil prices inched lower this week with the benchmark Brent crude up by 3.1 percent Week-on-Week to $66.6/bbl. Nigeria’s external reserves declined marginally by 0.5 percent Week-on-Week to $34.4bn.
Naira gained marginally by 0.04 percent to N411.50k on Monday compared to N411.67k quoted on Friday last week on the I&E window, data from the FMDQ indicated.
On Tuesday, Naira closed at N411.63k at the I&E window, which was 0.03 percent weaker than N411.50k closed on Monday.
Nigeria’s currency on Wednesday firmed against the dollar by 0.21 percent at the official market following increased liquidity.
On Thursday Naira lost 0.13 percent to close at N411.31k as against N410.75k closed on Wednesday at the I&E window.
The Monetary Policy Committee (MPC), chaired by the Central Bank of Nigeria (CBN) would be meeting for the third time on Monday and Tuesday, to decide the direction of interest rate and other macro-economic indicators.
Most of the analysts polled by BusinessDay pointed to a persistent rise in inflation, (though, reduced marginally in May), and transparency in foreign exchange (FX) harmonisation as major considerations for a hold decision at the meeting.
The CBN last week removed the official exchange rate of N379 per dollar from its website, as it adopted the I&E window at the official rate. However, the CBN’s official rate still remains at N379 per dollar as of May 10, 2021, on the homepage of the FMDQ website.
Foreign exchange speculators are expected to lose over N100 billion in the next month as the Central Bank of Nigeria (CBN) sustains massive funding for Bureaux De Change (BDC) operators.
Aminu Gwadabe, president, Association of Bureaux De Change Operators of Nigeria (ABCON), who disclosed this on Friday in Lagos, said the CBN is committed to improving funding for over 5,000 BDCs nationwide in a new move to deepen market liquidity and protect the naira against speculators.
Gwadabe attributed the continued fall of the naira at the parallel market and Investors’ and Exporters’ (I&E) Forex window to currency speculators hoarding dollars to profit from the currency crisis.
