Naira further strengthened at the I&E forex window, as local currency stabilizes
- 12th June 2020
- Posted by: Hakeem
- Category: Economics
The positive performance of the naira in the foreign exchange market continued on Thursday, as the local currency was strengthened at the Investors and Exporters (I&E) window.
The naira appreciated to N385.75 to a dollar at the I&E forex window, after the day’s trading session. It gained N1.19 against the dollar, when compared to the N386.94 to a dollar that it exchanged on Wednesday, June 10, 2020.
The exchange rate at the I&E window is different from the Central Bank of Nigeria’s published exchange rate, which currently stands at N360/$1. This is also different from the exchange rate at the parallel market, which was stable at N450 to a dollar, according to information on AbokiFX, as of Thursday.
Available information from the daily trading at FMDQ (where FX is traded by importers and investors) shows that the naira improved against the dollar by N1.75, closing at N385.75 to a dollar, as against the indicative opening rate of N387.50 to a dollar that it opened with on Thursday morning. The opening indicative rate on Thursday also represents a loss of N0.54 when compared to the N386.96 that it opened with on Wednesday.
A cursory look at data from the FMDQ shows that the turnover for the day witnessed a significant drop by about 80% at $12.45 million, when compared with the $62.28 million that was recorded the previous day.
In a related development, the naira on Thursday June 11, 2020, stabilized at the parallel market otherwise known as the black market as it exchanged for N450 to a dollar, which was the same rate that was recorded the previous day.
The stability of the naira at the black market can be attributed to a drop in demand for foreign exchange, especially by speculators at the market.
Despite the gains recorded by the naira at the I&E window and the drop in demand for dollars, the $12.45 million turnover on Thursday for over-the-counter spot market is a huge drop from the $300 million daily turnover that was recorded last year.