The intraday high recorded was N1130/$1 as the naira fell against the U.S. dollar at the official but closed flat at the parallel market.
The naira depreciation is coming after the local currency recorded a gain against the dollar in the official market the previous day.
The exchange rate between the naira and dollar fell to N814.60/$1 on Thursday at the official market.
This represents an N19.71 loss or a 2.42% decline in the local currency compared to the N794.89 it recorded on Friday.
The intraday high recorded was N1130/$1, while the intraday low was N701/$1, representing a wide spread of N429/$1.
According to data obtained from the official NAFEM window, forex turnover at the close of the trading was $100.06 million, representing a 31.97% increase compared to the previous day.
However, the naira closed flat at the parallel forex market where forex is sold unofficially, the exchange rate quoted at N1240/$1, the same as on Friday last week, while peer-to-peer traders quoted around N1159.20/$1.
The Central Bank of Nigeria (CBN) has said it has made tranche payments to 31 banks to clear the backlog of foreign exchange forward obligations.
The apex bank also disclosed that it has set up foreign exchange frameworks to address the FX issues.
Yemi Cardoso, governor of the CBN disclosed this on Friday at the bankers’ dinner in Lagos.
What Cardoso said
The CBN governor said:
- “We have already witnessed improvements in FX market liquidity in recent weeks, as the market responded positively to tranche payments which have been made to 31 banks to clear the backlog of FX forward obligations.
- “We have been subjecting these payments to detailed verification to ensure only valid transactions are honoured. In a properly functioning market, it is reasonable to expect significant FX liquidity, with daily trade potentially exceeding $1.0 billion.
- “We envision that, with discipline and focused commitment, foreign exchange reserves can be rebuilt to comparable levels with similar economies.”
The value of the Nigerian currency has been steadily declining as the country struggles with foreign exchange illiquidity and the inability to pay down its forex backlog.
