The naira lost ground at the parallel market, also known as the black market as it dropped against the dollar today it was selling at N456 to S1 as individuals rush in to meet their fx payment obligations
Information obtained from Everdon bureau de change showed that the naira traded at N450 to a dollar on Monday a differential of N6 from today’s offer price
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In addition, Nigeria’s foreign reserves which stood at $38.07 billion at the end of Q4, 2019 fell to $34.9 billion at the end of the Q1, 2020
In making forex payment obligations easy for individuals, the Central Bank of Nigeria sold forex from its Forex reserves to stabilize the currency exchange rate despite poor earnings in foreign exchange due to low crude oil prices.
(READ MORE: Naira depreciates at 5 years forwards market, now N570 to $1)
During the last Monetary Policy Meeting, the Central Bank Governor, Godwin Emefiele, said, “External reserves position stood at $34.9 billion in March 2020 as against $38.07bn in December 2019. He said,
“The depletion in external reserves was driven by FX sales to Bureau De Changes and Import & Export window as well as dwindling oil receipt.
“The current level of reserves is estimated to finance about 6.30 months of imports.”
Emefiele, who chaired the MPC meeting, said, “Based on the current downturn in oil prices, staff projections indicate that output in 2020 would be less than earlier envisaged.
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“The major downside risks to this outlook, however, include the continued spread of COVID-19; further decline in crude oil prices and the reduction in accretion to external reserves; reduced government revenue leading to weak aggregate demand; declining non-oil receipts; as well as infrastructural and security challenges.”