FX Turnover at the NAFEX market rose 140% to $92.1 million on Thursday as liquidity poured into the official Investor & Exporter window of the CBN. Nigeria’s exchange rate at the NAFEX window depreciated at N386.25 during intraday trading on Thursday, September 3, 2020, while it remained stable at N440/$1 at the parallel market.
Currency Developments
The central bank moved towards exchange rate unification last month after it devalued the official rate to N380/$1.
The local currency has been strengthened especially at the black market as the Central Bank of Nigeria introduces some measures targeted at exporters and importers in order to try to boost the supply of dollars in the foreign exchange market and reduce the high demand for forex by traders.
The resumption of sales of forex to BDCs will inject more liquidity to the retail end of the foreign exchange market and discourage hoarding and speculation.
However, the BDC operators have urged the apex bank to reconsider the margin allowed for the currency traders as it was inadequate to meet their expenses.
There has been a sharp drop in speculative buying of foreign exchange, although demand backlog by manufacturers and foreign investors still puts pressure and creates a volatile situation in the foreign exchange market.
Nairametrics had reported that the CBN pumped in $50 million into the forex market, primarily for foreign investors on the spot and forward market to gauge the level of demand in the market.
– Nairametrics