Naira drops at official market as demand for FX soars

Naira depreciated against the Dollar at the official foreign exchange (FX) market on Thursday, February 2 amid increased demand for the dollar.

The Naira loss on Thursday was the first in three days and it comes on the same day, CBN relaxed its rule on cash withdrawal over-the-counter in banks.

While the CBN now allows banks to pay customers in new notes, it has set a transaction limit of N20,000, which does little to alleviate the pressure as customers continue to scramble for both local and foreign currencies.

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The pressure in the market led the Naira to lose 50 Kobo or 0.11 percent of its value to close at N462.00/$ at investors and exporters window, the official FX window.

The pressure the naira came under at the official market window was clearly evident as participants exchanged at $119.35 million, in contrast to the preceding session’s $105.37 million, representing an increase of 13.3 per cent or $13.98 million.

Also at the Peer-to-Peer (P2P), parallel market the naira closed lower against the US dollar on Thursday.

In the P2P market, the local currency fell by N2 against the greenback to sell at N762/$1 compared to the preceding day’s value of N760/$1.

While at the black market, the Nigerian currency also depreciated against the American Dollar yesterday by N2 to trade at N752/$1, in contrast to the midweek’s rate of N750/$1.

However, in the interbank segment, the Naira appreciated against the British Pound Sterling by 10 Kobo to trade at N568.32/£1 versus N568.42/£1, and against the Euro, it depreciated by N4.79 to close at N507.14/€1 compared with the previous session’s N502.35/€1.