Naira retracts gains at official window despite surge in FX supply

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Naira retracted its initial gain recorded in the previous trading session as the exchange rate between the naira and the US dollar depreciated by 0.18% to close at N419.25/$1 compared to N418.5 recorded on Wednesday.

Similarly, the exchange rate against the US dollar depreciated by 0.33% on Thursday morning at the peer-to-peer market, trading at a minimum of N605/$1 compared to N603/$1 recorded as of the same time the previous day.

Meanwhile, the exchange rate at the parallel market remained stable at N590 to a dollar. This is according to information obtained from BDCs operating in Nigeria.

Naira depreciated against the US dollar on Wednesday by 0.18% to close at N419.25/$2 compared to N418.5/$1 recorded on Tuesday.

READ ALSONaira appreciates by 0.71%, exchanges at 418.50 to dollar

The opening indicative rate closed at N418/$1 on Wednesday 18th May 2022, 57 kobo depreciation compared to N417.42/$1 recorded on Tuesday, 17th May 2022.

Furthermore, an exchange rate of N444/$1 was the highest rate recorded during intra-day trading before it settled at N419.25/$1, while it sold for as low as N410/$1 during intra-day trading,

A total of $201.34 million in FX value exchanged hands at the official Investors and Exporters window on Wednesday.

According to the data from the FMDQ, forex turnover improved by 91.55% from $105.11 million recorded on Tuesday to $201.34million on Wednesday, 18th May 2022.

READ ALSONaira falls to over 4-month low at official market

Nigeria’s external reserve fell further below the $39 billion threshold on Tuesday as the level recorded a 0.09% decline to stand at $38.88 billion from $38.92 billion recorded as of the previous day. The last time Nigeria’s external reserve level was below $39 billion was seven months ago, 8th October 2021 specifically.

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.