By Francis Ogwo
There was a sharp rise in Tuesday of Forex turnover as it sharply rose by 183.7%. This is with the Naira exchanging at a depreciated closing rate of N394.67 to a dollar at the NAFEX window.
At the parallel market also, the Naira remained stable against the dollar with a closing rate of N476/$1 as Nigeria’s external reserves lost $437 million in 2 weeks, declining from $35.262 billion as of December 3, 2020, to $34.825 billion as of December 17, 2020.
Experts say this resulted in more pressure on the country’s external reserve as it impacts on CBN’s capacity to intervene in the foreign exchange market.
Sources from Abokifx website, popular with forex tracking, said the Naira remained stable against the Dollar to close at N476/$1 on Tuesday – exactly the same rate that it exchanged for on Monday, December 21.
The naira local currency had strengthened by about 7.8% within one week in September at the black market, as the CBN introduced some measures targeted at exporters and importers.
Significantly, this would boost the supply of dollars in the foreign exchange market and reduce the high demand for forex by traders.
However, the gains appear to have been completely erased with the recent crash of the exchange rate.
The CBN has sold over $1 billion to BDCs since they resumed forex sales on Monday, September 7, 2020.
This was expected to inject more liquidity into the retail end of the foreign exchange market and discourage hoarding and speculation.
However, the exchange rate against the dollar has remained volatile after the initial gains made, following the CBN’s resumption of sales of dollars to the BDCs.
At the moment, the foreign exchange market is under heavy pressure with huge demands from manufacturers and foreign investors despite CBN intervention.