Despite nearly 90% rise in dollar supply, naira remains weak

The naira has remained weak at official foreign exchange (FX) despite a nearly 90 percent of dollar supply by commercial banks and other market operators.

The summary of the FX trading released by the FMDQ Securities Exchange Limited showed that the naira depreciated by 4.40 percent as the dollar was quoted at N1,416.57 on Tuesday, weaker than N1,354.21 quoted on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

The dollar supplied by willing sellers and willing buyers increased by 89.52 percent to $160.77 million on Tuesday from $84.83 million recorded on Monday.

During the spot trading
, the intraday high printed flat at N1,445 per dollar on Tuesday, from N1,441 on Monday. The intraday low closed at N1,301 on Tuesday, weaker than N1,285/$1 closed on Monday.

At the parallel market, also known as the black market, the Naira also remained volatile, following shortage of dollar and increased demand.

The local currency steadied at N1,430 in some areas, while it exchanged for N1,445 in some other areas of street trading market.

Last week, the exchange rate at the NAFEM window closed the week 4.37 percent weaker against the US dollar at N1,400.40/US$1, according to a report by Coronation Research.

In the parallel market, the exchange rate

remained unchanged at N1,400.00/US$1 after appreciating to N1,360.00/US$1 earlier.

“At the close of the week, the gap between the official and street markets had been cleared. The CBN’s published gross foreign exchange reserve added 0.41 percent on the week, to close at US$33.29bn”, the report noted.