Naira appears stable across forex markets

Despite the volatility and scarcity of foreign exchange, the naira appears stable across the forex markets as it closed at N385.99 at the NAFEX window on Tuesday, while it also went for N477 to a Dollar at the parallel market.

The average daily forex sale for last week was about $71.13 million which represents a significant increase from the $24 million that was recorded the previous week. The day’s FX turnover is a far cry from the $200 million mark that was recorded sometime last week.

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 has remained as wide as N91. 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.

At the black market where forex is traded unofficially, the Naira remained stable against the dollar to close at N477/$1 on Tuesday, according to information from Abokifx, a prominent FX tracking website. This was the same rate that it exchanged on Monday, August 24.

The Naira also remained stable against the dollar at the Investors and Exporters (I&E) window on Tuesday, closing at N385.99/$1. This was about the same rate that it exchanged the previous trading day, Monday, August 24, 2020.

The opening indicative rate was N385.64 to a dollar on Tuesday. This represents a 74 kobo gain when compared to the N386.38 to a dollar that was recorded on Monday.

The N386 to a dollar is the highest rate during intraday trading. 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.

The dollar shortage has forced banks to reduce drastically the dollar spending limits on their debit cards.

Meanwhile the CBN has moved to clamp down on foreign exchange abuse by dealers which affects prices of goods by directing banks to stop selling to third parties forex that is routed through Form M.