Naira weakens further at official market, drops to N788.4/$1

The Naira weakened by 5.96 percent to close at N788.42/$ at the investors and exporters (I&E) window on Wednesday, Nigeria’s official exchange rate window.

According to data from FMDQ Securities Exchange, a platform that oversees foreign exchange (FX) trading in Nigeria, the naira hit an intra-day trading high of N803 and a low of N730 but closed trading at N788.42 per US dollar.

FMDQ quoted an opening rate of N764.42 to the dollar on Tuesday. The total value of trades recorded at the I&E window stood at $68.10 million.

Similarly, at the parallel section of the market, the local currency depreciated to N810 per dollar on Wednesday.

The currency sold for N793/$ at the parallel market last Friday.

Bureaux De Change operators (BDC) in the Ikeja area of Lagos said they bought the greenback for N800, made a gain of N10, then sold at N810 on Wednesday.

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The Central Bank of Nigeria (CBN) has constantly maintained that the parallel market (also known as black/parallel market) represents less than one percent of forex transactions and should never be used to determine the exchange rate.

Last month, the apex bank unified all segments of the FX market, signalling the floating of the naira.

Traders recently told Bloomberg that the CBN is intervening in the markets to prevent sharper losses in the currency.

The news agency reported that some traders said the interventions of the CBN are helping to avoid swings in the naira’s value but that the dollar sales have been too modest to say the local currency is getting pegged again.

“The market expects the Central Bank of Nigeria to intervene more than once this week given the size of intervention yesterday and the current demand across the market,” RMB analysts wrote in a note.

On his part, Ayodeji Dawodu, director at UK-based BancTrust & Co. Investment Bank, said, “The central bank has been intervening into the market over the last two weeks or so to support liquidity but this has not been very consistent.”