Naira Appreciates Despite 168% Rise in Dollar Demand Wednesday

By Adedapo Adesanya 

The mid-week trading day at the foreign exchange market on Wednesday October 16, 2019 was good for the local currency as the Naira appreciated against the US Dollar both at the Interbank and Investors and Exporters (I&E) segments of the market.

According to data gathered by Business Post from the FMDQ, the local currency was strengthened against the American currency by 5 Kobo or 0.02 percent to trade N306.90/$1 at the Interbank window compared with N306. 95/$1 it was exchanged the previous trading day.

At the I&E segment, the domestic legal tender gained 27 Kobo equivalent to 0.07 percent at the midweek session to close at N362.36 to a single Dollar in contrast to N362.63/$1 it was quoted on Tuesday.

Despite this, there was a rise in the market turnover at the investors’ window on Wednesday. It was the second consecutive day this week the market turnover was going.

According to data from the FMDQ, traders at the segment recorded transactions valued at $207.57 million at the I&E yesterday, higher than the $77.57 million recorded on Tuesday, indicating a difference of $130 million or 167.6 percent increase.

However, the good performance of the Naira did not extend to the parallel market as the local currency remained flat against the US Dollar at N360/$1 but depreciated against the Pound Sterling and the Euro.

Business Post reports that the local currency depreciated by N3 against the British Pound Sterling on Wednesday to trade at N453/£1 from N450/£1 as news circulated that British and EU officials held talks on Wednesday, after late-night talks were held on Tuesday ahead of the UK leaving the EU on October 31.

This indicated that progress was apparently made ahead of the crucial two-day EU summit that begins Thursday.

In the same vein, The Naira also followed the same movement against the Euro as it also depreciated by N1 to close at N393/€1 from N392/€1 which it traded at the previous session.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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