Nigeria’s exchange rate at the NAFEX window remained stable to close at N385.50 during intraday trading on Tuesday, August 11, 2020. In a similar development, the exchange rate at the parallel market remained stable for a second consecutive trading day on Tuesday as it closed at N475/$1 after exchanging for as high as N485/$1.
Parallel Market: At the black market where forex is traded unofficially, the Naira remained stable again against the dollar to close at N475/$1 on Tuesday, according to information from Abokifx, a prominent FX tracking website. This was the same rate that it exchanged on Monday, August 10.
NAFEX: The Naira remained stable against the dollar at the Investors and Exporters (I&E) window on Tuesday, closing at N385.50/$1.
- This was the same rate that was reported on the last trading day, Monday, August 10.
- The opening indicative rate was N386.20 to a dollar on Tuesday. This represents a 3 kobo drop when compared to the N386.17 to a dollar that was recorded on Monday.
- The Naira fell to as high as N387 during intraday trading before strengthening to the closed rate of N385.50. It also sold for as low as N380/$1 during intraday trading.
Forex is sold at several prices and at different times during the day.
Forex Turnover: Meanwhile, forex turnover at the Investor and Exporters (I&E) window improved significantly on Tuesday, August 11, 2020, as it rose by 705% day on day.
- According to the data tracked by Nairametrics from FMDQ, forex turnover rose from $3.97 million on Monday, August 10, 2020, to $31.96 million on Tuesday, August 11, 2020.
- The forex turnover for the day although improved significantly from the previous trading day, still remained low. This just as dollar supply has remained very weak.
- The average forex sale for last week was about $50.6 million which is an improvement on the $32 million that was recorded the previous week. FX turnover which hit a record low of $3.97 million, recorded a significant improvement but is still a far cry from the over $200 million turnover that was recorded in January.
- Total forex trading at the NAFEX window in the month of July was $937 million compared to $875 million in June.
- The exchange rate disparity between the official NAFEX rate and the black-market rate is still as wide as N89.5. Nigeria maintains multiple exchange rates comprising the CBN official rate, the BDC rates, SMIS, and the NAFEX (I&E window). The wide disparity between the 2 rates has created huge arbitrage opportunities for some highly connected individuals.
Download the Nairametrics News App
Exchange rate unification remains on the cards and yet to be implemented weeks after the central bank governor confirmed it will be executed.
The foreign exchange market appears to be getting used to the recent adjustment of the official exchange rate by the Central Bank of Nigeria.