Naira falls to N608/$1 at P2P exchange market

Exchange rate at the peer-to-peer market declined by 0.32% to trade at $608.12 on Wednesday morning, compared to N606.2/$1 recorded as of the same time the previous day.

The downturn in the market is following the hawkish move of the apex bank in raising interest rates.

It however recorded a 0.32% gain against the US dollar to close at N419/$1 at the Investors and Exporters (I&E) window, where forex is traded officially compared to N420.33/$1 recorded as of the close of trading activities on Monday, 23rd May 2022. Also, a total of $87.06 million in FX exchanged hands in the market on Tuesday, representing a 15.69% increase compared to $75.25 million traded in the previous session.

The exchange rate at the parallel market closed at N605/$1 on Tuesday, a 0.17% downturn compared to N604/$1 recorded in the previous trading session. Recall that the exchange rate fell sharply last week as FX liquidity tightened in the market. This is according to information obtained from BDCs operating in Nigeria.

READ ALSO: Naira has lost 70% of its value since 2014, survey reveals

Nigeria’s external reserves depreciated further by 0.26% on Monday to stand at $38.65 billion from $38.75 billion recorded as of the previous day. The decline in the external reserve level can be attributed to the continuous intervention by the Central Bank in the FX market in order to ensure the stability of the local currency.

Furthermore, an exchange rate of N444/$1 was the highest rate recorded during intra-day trading before it settled at N419/$1, while it sold for as low as N410/$1 during intra-day trading.

A total of $87.06 million exchanged hands on Monday, representing a 15.69% increase compared to $75.25 million traded on Monday.

READ ALSO: CBN raises lending rate to 13%, remains mute on digital assets

The Nigerian Central Bank raised the benchmark interest rate (MPR) to 13% on Tuesday after the MPC meeting, after 2 years of adopting a low-interest rate regime, in response to the 2020 economic recession. However, with the rising inflation numbers, the apex bank has joined other country apex banks in raising interest rates in a bid to curb the inflationary pressure.

Meanwhile, despite the regulation released by the Securities and Exchange Commission (SEC) on cryptocurrency, the Central Bank of Nigeria remained mute concerning the development during the press briefing of the Monetary Policy Committee meeting held on Tuesday, 24th May 2022.

Advertisement