The naira was weakened on the first working day of the week as it depreciated to N387.33 to a dollar at the Investors and Exporters (I&E) window, after the day’s trading session. The local currency lost N0.83 against the dollar, when compared to the N386.50 to a dollar that is traded on Friday, June 8, 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 Monday, June 8, 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 N0.13, closing at N387.33 to a dollar, as against the indicative rate of N387.46 to a dollar that it opened with on Monday morning. The opening indicative rate on Monday also represents a marginal gain of N0.29 when compared to the N387.75 that it opened with on Friday last week.
A cursory look at the data from the FMDQ shows that the turnover for the day dropped sharply by about 87% at $14.66 million. This is against the $112.89 million turnover that was recorded on Monday, June 8.
However, the local currency was stable at the parallel market, otherwise known as the black market as there was no movement. The naira exchanged for N450 to a dollar at the parallel market, which was the same rate it exchanged on Friday last week.
The depreciation of the naira at the I&E window may be attributed to a drop in dollar liquidity in the foreign exchange market despite improved foreign exchange earnings due to an increase in crude oil prices.
Oil prices hit about $43 per barrel earlier today as sustenance of this increase will help stabilize the already fragile economy and ease the liquidity crisis in the forex market.