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Naira falls across forex markets as CBN moves against IMTOs

Naira falls across forex markets as businesses resume after public holidays

On January 22, 2021, the exchange rate between the naira and the dollar depreciated closing at N394.17/$1 at the NAFEX (I&E Window) where forex is traded officially.

Forex turnover, however, dropped by about 42.2% as pressure on the foreign exchange market continues.

The Central Bank of Nigeria (CBN) in a new circular, read the riot act to the International Money Transfer Operators (IMTOs) as they have threatened to sanction some of them who still facilitate diaspora remittances in naira, contrary to its earlier directive that it must be in foreign currency.

READ: Nigeria faces prolonged exchange rate crisis as oil prices remain stuck at $40

Also, the exchange rate at the black market where forex traded unofficially depreciated at N477/$1. The exchange rate at the parallel market closed at N475/$1 on the previous trading day of January 21, 2021, representing a N2 drop.

The exchange rate disparity between the parallel market and the official market is about N82.83, representing a 17.36% devaluation differential.

READ: CBN to prevent exporters with unrepatriated export proceeds from banking services

The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Friday, closing at N394.17/$1. This represents a 17 kobo drop when compared to the N394/$1 that it closed on the previous trading day.

READ: A summer of higher food prices, limited room for monetary policy

Oil price steady rise

Brent crude oil price is at about $55.34 per barrel as of Monday morning, as it moves towards the $60 mark, a strong sign that global demand could sustain price increases in 2021.

READ: A Joe Biden presidency and its impact on Nigeria’s oil

Nigeria rising external reserves

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