Renewed Pressure Weakens Naira at I&E Window
By Adedapo Adesanya
More pressure is beginning to mount on the Naira at the Investors and Exporters (I&E) segment of the foreign exchange market.
At the I&E window on Thursday, the local currency depreciated by 0.49 percent or N1.88 against the United States Dollar to sell at N386.38/$ in contrast to N384.50/$ it traded the previous session.
Business Post observed that the weakening of the Nigerian currency against its American counterpart was influenced by the huge demand for the latter as reflected by the value of transactions recorded at the market segment.
According to data from the FMDQ Securities Exchange, there was sharp spike in the transactions value by 431 percent yesterday.
Trades valued at $102.28 million were recorded at the investors’ segment on Thursday compared with the $19.26 million quoted on Wednesday.
The increase was boosted by the urge for foreign investors to liquidate their Naira investments after the local authorities eased the lockdown imposed on Abuja, Lagos and Ogun States over five weeks ago to curtail the spread of coronavirus in the country.
However, at the black market segment yesterday, the Naira to Dollar exchange rate remained unchanged at N430/$, though the local currency lost N10 against the British Pound Sterling to sell at N530/£1 as against N520/£1 it traded on Wednesday. Meanwhile, the Naira gained N10 on the Euro to trade at N440/€1 in contrast to N450/€1 of the previous session.
At the interbank segment of the forex market, the Central Bank of Nigeria (CBN) sold the greenback to lenders at the rate of N361/$1, the same rate it was sold on Wednesday.
At the Bureaux De Change (BDC) segment of the market, according to information from the Association of the Bureau De Change Operators (ABCON), the local currency closed flat against the Dollar at N440/$1.
However, it depreciated against the Pound by N5 to close at N530/£1 compared with N525/£1 it previously traded and remained unchanged against the Euro at N460/€1.
At the Port Harcourt BDC market on Thursday, the Naira gained N27 on the American currency to close at N430/$1 in contrast to N457/$1 of the prior day. Against the Pound, the local currency depreciated by N7 to trade at N515/£1 yesterday in contrast to the previous day’s N508/£1 and against the Euro, it appreciated by N10 to sell at N450/€1 versus N460/€1 on Wednesday.
In Abuja, BDC traders traded the Naira against the Dollar at N457/$1, the same rate of Wednesday and against the Pound and the Euro, the rates remained unchanged at N498/€1 and N440/€1 respectively.
At the Kano market, the Naira closed flat against the greenback at N459/$1. It was a similar situation with the Pound and the Euro as the rates closed flat at N498/£1 and N440/€1 respectively.