Nigeria’s currency on Monday dropped in value by N7 as the dollar was trading at N460 from N453 and N452.67k traded at the weekend and Friday on the black market.
This is in spite of the dollar allocation to about 5,000 Bureau De Change (BDC) operators in the country by the Central Bank of Nigeria (CBN).
Nigeria’s Central Bank sells $10,000 twice weekly to the retail Bureaus from the proceeds from the International Money Transfers Operators (IMTOs).
Investigation show that dollar was selling at N460 in Lagos except at the airport where it was selling at N461. Traders were buying at N455 from individual sellers.
At the BDC segment of the foreign exchange market, naira weakened by N1.00k as the dollar was sold at N462 during intraday trading from N461 in the morning on Monday.
The CBN had sold a total of $101.8 million to BDCs last week. Nigeria’s central bank resumed dollar sales BDC operators on Monday, September 7, 2020, selling $51.8 million to 5,180 BDCs across the country.
The foreign exchange opened on Monday with an indicative rate of N386.38k at the Investors and Exporters (I&E) forex window. This signals N0.25k deprecation when compared with N386.13k opened with on Friday, data from the FMDQ revealed.
The average turnover at the I&E window fell by 4.9 per cent from $0.043 billion in April to $0.041 billion in May 2020; a decrease of 78.8 per cent below the level in May 2019, according to the CBN’s economic report for the month of May, 2020.
During the month under review, the average exchange rate of the naira at the Interbank segment of the foreign exchange market remained unchanged at N361.00/US$, relative to April, 2020. It, however, depreciated by 15.0 per cent, compared with the corresponding month of 2019. The rate at the I&E window, at N386.25/US$, depreciated by 0.3 per cent and 6.6 per cent relative to N384.99/US$ in April 2020 and N360.70/US$ in May 2019, respectively.
Similarly, at N443.33/US$, the naira depreciated by 5.2 per cent and 18.9 per cent at the BDC segment, relative to N420.15/US$ in the preceding month and N359.75/US$ in May 2019. Consequently, the interbank/BDC premium widened from 16.4 per cent in the preceding month to 22.8 per cent in May 2020. The premium between the BDC/I&E also widened to 14.8 per cent from 9.1 per cent, in the preceding month. These outcomes are attributable to the sustained demand pressure in the foreign exchange market.