The exchange rate between the naira and the dollar appreciated on Monday, closing at N393.83/$1 at the NAFEX (I&E Window) where forex is traded officially.
This is as Nigeria’s external reserves added $1 billion in 15 days to rise to $36.3 billion.
Also, the exchange rate at the black market where forex traded unofficially maintained stability at N475/$1. The exchange rate at the parallel market closed at N475/$1 on the previous trading day of January 14, 2021.
This is as the Central Bank of Nigeria sustains its intervention across the foreign exchange markets to meet the needs of manufacturers and end-users who need dollars for their medical trips, school fees payments, travel allowances, and others.
The apex bank has also resumed its dollar sales to Bureau De Change operators.
The exchange rate disparity between the parallel market and the official market is about N81.17, representing a 16.9% devaluation differential.
The Naira appreciated against the dollar at the Investors and Exporters (I&E) window on Monday, closing at N393.83/$1. This represents an 84 kobo gain when compared to the N394.67/$1 that it closed on the previous trading day.
The opening indicative rate was N394.07 to a dollar on Monday, representing a 95 kobo drop when compared to the N393.12 that was recorded on Friday, January 15, 2021.
The N415.76 to a dollar was the highest rate during intra-day trading before it closed at N393.83 to a dollar. It also sold for as low as N388/$1 during intra-day trading.
Forex turnover at the Investor and Exporters (I&E) window increased by 71.2% on Monday, January 18, 2021.
According to the data tracked by Nairametrics from FMDQ, forex turnover rose from $40.31 million on Friday, January 15, 2021, to $69 million on Monday, January 18, 2021.
The average daily forex sale for last week was about $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand, and a shaky economy that has been hit by the coronavirus pandemic.
There are fears that the exchange rate at the black market might be under pressure in the coming weeks as importers scramble for dollars to meet their demands.
Nigeria rising external reserves
The external reserve has risen to $36.3 billion as of January 15, 2021, suggesting that the government may have taken receipt of the $1-1.5 billion World Bank Loan.
They increased by $1 billion since December 31, 2020, when it closed the year at $35.3 billion. The unification of the exchange rate was previously cited as a major requirement for receiving the world bank facility.
Nigeria needs the external reserves to hit $40 billion if it is to adequately meet some of the pent up demand that has piled up since 2020 when oil prices crashed and the pandemic caused major economic lockdowns.
(Nairametrics)