The naira weakened slightly against the dollar, having depreciated to N386.42 at the Investors and Exporters (I&E) window even though the foreign exchange market witnessed improved liquidity. The local currency weakened by N0.09 against the dollar when compared to the N386.55 to a dollar it traded on Wednesday, May 20, 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. It is also different from the exchange rate at the parallel market, popularly known as the black market, which is N460/$1, according to information obtained from AbokiFX as of Wednesday, May 20, 2020.
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 N1.71, closing at N386.42 to a dollar, as against the indicative rate of N388.13 to a dollar that it opened with on Wednesday, May 20, 2020.
A cursory look at the data from the FMDQ shows that the turnover for the day was $85.61. However, it is still a far cry from the $300 million – $400 million per day that it traded in February.
The foreign exchange market has witnessed improved liquidity recently, following intervention by the Central Bank of Nigeria. The apex bank had promised to make foreign exchange available for activities that would help boost the economy and generate jobs for Nigerians.
The CBN Governor had also advised businesses to stop patronizing the parallel market as it had the ability to meet the genuine demands of businesses that needed foreign exchange.
Meanwhile, in a related development, according to a monitored report from the punch, the President of the Association of Bureau De Change Operators (ABCON), Aminu Gwadabe, warned members and forex speculators buying up dollars and putting pressure on the naira to stop such activities or risk losing their money.
He said that the CBN had concluded plans to resume dollar sales to BDCs very soon and that the return of the BDCs to the forex market would help strengthen the naira.