Naira on Tuesday gained marginally against the dollar as demand eased slowly at the parallel market, also known as black market.
During the morning trading session on Tuesday, one dollar was trading at the rate of N754 per dollar, gaining 0.13 percent (N1/$1) compared to N755 traded on Monday at the unofficial market.
At the Investors and Exporters (I&E) forex window, Nigeria’s official foreign exchange market, naira gained slightly by 0.05 percent (N0.25/$1) as the dollar was quoted at N461.50 on Monday, as against N461.75/$1 quoted on Friday, data from the FMDQ indicated.
The marginal gain was supported by increased activity on the I&E window as the daily foreign exchange market turnover rose by 54.05 percent to $150.49 million on Monday from $97.69 million recorded on Friday last week.
Over the years, Naira has remained under pressure. Last year, it depreciated to a peak of N890/$ at the parallel market, in 2022. The local currency weakness followed increased demand amid short supply of the greenback.
Aggregate inflows of foreign exchange into the country from all sources still fall short of the country’s demand hence the sustained pressure on the external reserve and consequently the relative value of the Naira, a Lagos based analyst said.
Nigeria’s external reserves have declined by 8.54 percent year-on-year to $37.04 billion as of January 27, 2023 from $40.50 billion at the beginning of last year.
Godwin Emefiele, the governor of the CBN, said last year that the Nigerian foreign exchange market was in the middle of a serious crunch which was straining the country’s reserves and stifling the value of the naira. Market demand for both goods and invisible transactions has continued to increase under various uses in the face of dwindling supply of foreign exchange.
The official foreign exchange receipt from crude oil sales into Nigeria’s official reserves has dried up steadily from above $3.0 billion monthly in 2014 to absolute zero dollars last year.
To boost foreign exchange earnings in the country, the CBN and the Bankers’ Committee initiated the RT200 programme in February 2022.
The programme was fundamentally devised to innovatively tackle the fundamental problem associated with the repatriation of non-oil export proceeds.
“So far, we have recorded and continue to record resounding success with the RT200 programme,” he said. According to him, inflows through this programme in 2022 rose to about $1.6 billion and could surpass $2.5 billion by year-end.
“Under the rebate scheme of the programme, the central bank has reimbursed a total of N78.4 billion, which I consider a fair price to incur to stabilise our foreign exchange market,” Emefiele said.
