The Naira has appreciated to N386.94 against the US dollar at the Investor and Exporters (I&E) window. This is against the N387.88 to a dollar it recorded on Monday morning as investors scrambled for forex supplies.
It must be noted that the exchange rate at the I&E window differs from the CBN’s published exchange rate, which is currently stated at N360/$1. This is also different from the exchange rate at the parallel market, which is still at N445/$1 according to information on AbokiFX as of Monday, May 11, 2020.
Available information from the FMDQ (where FX is traded by investors) shows that the naira appreciated against the dollar by N0.94, closing at N386.94 to a dollar, as against the N387.88 to a dollar that it opened with on Monday, May 11, 2020. The exchange at the end of last week was N387.25/$1.
A cursory look at the data from the FMDQ shows that the turnover was $9.98 million on Monday, May 11. This is a far cry from the $102.28 million that was recorded on Friday, May 8.
The appreciation of the naira is coming up despite the pressure on the foreign exchange market and increased demand by importers and foreign portfolio investors, who want to repatriate the proceeds of their funds, in the debt market. Analysts who spoke to Nairametrics indicated the situation has been like this for weeks and may have culminated in the repricing witnessed in the futures market last week Thursday.
Just yesterday, a report from Bloomberg, suggested that manufacturers are struggling to stay in business because of foreign exchange scarcity due to the crash in crude oil prices. This means they will find it difficult to import raw materials.
FBNQuest estimates that there is a $1 billion backlog of outstanding dollar demand that has not been met.
Although oil prices seem to be improving in the recent period, it is still short of expectations and the budget benchmark.