Nigeria’s currency on Wednesday signalled further depreciation at the Investors and Exporters (I&E) forex window after weakening to a three-month low on Tuesday due to dollar scarcity.
The foreign exchange market opened on Wednesday with naira trading at N410.66k per dollar, lower than N409.30k it traded during intraday trading on Tuesday, data from the FMDQ revealed.
At the parallel market and Bureau De Change (BDC) segments of the foreign exchange market, the local currency is trading steady at N480 per dollar on Wednesday.
On Tuesday, naira weakened to its lowest level in three months as shortage of dollars persists in the foreign exchange market.
After trading on Tuesday, naira lost 0.59 percent of its value, closing at N411.63k per dollar, from N409.20k it closed the previous day at the Investors and Exporters (I&E) forex window, data from the FMDQ indicated.
Prior to now, the local currency recorded its lowest depreciation on December 31, 2020, when it fell to N410.25k per dollar. The depreciation was attributed to the strong demand for dollars by the end-users to meet their various obligations.
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.
Foreign exchange sales to authorised dealers by the Central Bank of Nigeria (CBN) was US$1.27 billion in November 2020, a decrease of 18.5 percent and 63.1 percent below the levels in the preceding month and the corresponding month of 2019, respectively, a report by the apex bank showed.
Nigeria’s external reserves declined to $34.9 billion as at March 1, 2021, according to the data on the CBN website.