Naira Remains Stable At Parrallel Market As Dollar Supply Up By 1183% Despite Curfew

Exchange rate depreciates at NAFEX window as forex liquidity drops further by 57%, Central Bank Continues intervention in Forex market to stabilize Naira, Naira to depreciate slightly over $1.52 billion maturing contracts expires, Naira hits N388.84 to $1 at the currency spot market, Investors and Exporters (I&E) window, Naira weakens against the dollar by 1.14% amidst uncertainty, Naira gains against the dollar at I&E window, forex liquidity up by 242%

Forex turnover improved significantly by 1183% as Nigeria’s exchange rate at the NAFEX window depreciated against the dollar to close at N386/$1 during intraday trading on Thursday, October 22.

Also, the naira remained stable against the dollar, closing at N463/$1 at the parallel market on Thursday, October 22, 2020, as violence increases across the country despite the curfew.

This is also as businesses shut down due to the outbreak of violence in some parts of the country including Lagos during the protest against the special anti-robbery unit (SARS) and police brutality by the Nigerian youth.

Parallel market: According to information from Abokifx, a prominent FX tracking website, at the black market where forex is traded unofficially, the Naira remained stable against the dollar to close at N463/$1 on Thursday. This was the same rate that it exchanged for on Wednesday, October 21.

The local currency had strengthened by about 7.8% within the one week in September at the black market, as the CBN introduced some measures targeted at exporters and importers, in order to try to boost the supply of dollars in the foreign exchange market, and reduce the high demand for forex by traders. The measure
The CBN has sold over $500 million to BDCs since they resumed forex sales on Monday, September 7, 2020. This was expected to inject more liquidity to the retail end of the foreign exchange market and discourage hoarding and speculation.
However, the exchange rate against the dollar has remained volatile after the initial gains made, following the CBN’s resumption of sales of dollars to the BDCs.
The President of the Association of Bureau De Change Operators, Aminu Gwadebe, said he expects the impact of the extra liquidity in the market to be gradual.
Despite the drop in speculative buying of foreign exchange, the huge demand backlog by manufacturers and foreign investors still puts pressure and creates a volatile situation in the foreign exchange market.

NAFEX: The Naira remained stable against the dollar at the Investors and Exporters (I&E) window on Thursday, closing at N386/$1.

This was the same rate that it exchanged for on Wednesday, October 21.
The opening indicative rate was N386.13 to a dollar on Thursday. This represents a 11 kobo gain when compared to the N386.24 that was recorded on Wednesday.
The N386 to a dollar is the highest rate during intraday trading. It also sold for as low as N384/$1 during intraday trading.

Explore Data on the Nairametrics Research Website

Forex turnover: Forex turnover at the Investor and Exporters (I&E) window increased significantly by 1182.9% on Thursday, October 22, 2020.