1,065.4% Rise in Demand for Dollars Weakens Naira at I&E

By Adedapo Adesanya 

The Naira, backed by Christmas activities, gained against major foreign currencies at the parallel market for the second consecutive trading day on Tuesday, December 24. At the close of business, the local currency appreciated against the US Dollar, British Pound Sterling and the Euro.

Business Post reports that the highest gain at the segment of the foreign exchange (forex) market was against the Euro as the Nigerian Naira appreciated by N2 to close at N398/€1 compared with N400/€1 it transacted on Monday at the same market window.

For the second time this week, the Naira closed stronger against the American Dollar, growing by another N1 to settle at N361 per Dollar compared with N362/$1 it traded at the previous session.

In the same vein, the domestic currency gained more strength against the British Pound at the black market on Tuesday, appreciating by N1 to quote at N477/£1 in contrast to N478/£1 it exchanged on Monday.

Meanwhile, at the Investors and Exporters (I&E) segment of the market, the Nigerian currency depreciated marginally against the Dollar by 4 Kobo equivalent to 0.01 percent to close at N364.20 against the greenback compared with N364.17 to one Dollar on Monday.

Data obtained by Business Post from FMDQ showed that the value of transactions recorded at the investors on the eve of Christmas broadly increased by a staggering 1,065.4 percent or $1.3 billion.

At the close of business on Tuesday, the market turnover stood at $1.42 billion compared with $121.68 million recorded at Monday’s trading session, causing pressure on the local currency. This pressure is expected to continue at the market segment till after the New Year holiday next week because of persistent huge demand for Dollars.

But at the official window of the Central Bank of Nigeria (CBN), which is also referred to as the interbank segment, the Naira experienced no change against the US Dollar as it closed at N307/$1 on Tuesday.