Naira strenghtens further at the parallel market

The rally of the naira at the parallel market, popularly called the black market, continued as the currency was marginally strengthened 2 days in a row against the dollar.

Information from Abokifx shows that the naira appreciated to N453 to a dollar on Thursday, May 28, 2020. This represents a N2 gain when compared to the N455 to a dollar that it exchanged at the end of Wednesday trading.

This could be attributed to lower demand for foreign exchange at the parallel market.

In another development, the local currency moved slightly in the opposite direction at the Investors and Exporters (I&E) window as it depreciated to N386.33 to a dollar.

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This shows a loss of N0.39 when compared to the N385.94 to a dollar that was recorded yesterday, Wednesday, May 27, 2020.

This is coming against the backdrop of a decline in the daily turnover to $22.65 million at the I&E window. This represents a drop of $8.73 million when compared to the $31.38 million that was recorded the previous day.

The performance of the naira in the 2 forex markets is coming on a day that the Central Bank of Nigeria against expectations reduced the Monetary Policy Rate (MPR) to 12.5% from 13.5%. This decision was taken after today’s monetary policy committee meeting and that is the lowest rate in the last 4 years.

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In a bid to create more confidence in the forex market, the CBN Governor Godwin Emefiele had assured foreign investor of the safety of their investments despite a drop in foreign exchange earnings due to low oil prices.

However, the future outlook appears more positive following, the rebound of crude oil prices above the revised $25 per barrel benchmark and more foreign exchange earnings for the country.