Naira loses 0.60% as shortage of dollars persists in the official market

The naira, the national currency, depreciated by 0.60% against the dollar on Monday, following shortages in the official foreign exchange market.

As of Monday’s close of trading, the naira closed at 421.50 naira to the dollar from 419.00 naira/$ Friday on the Investors and Exporters (I&E) foreign exchange market, according to data from the FMDQ.

Most forex traders who participated in Monday’s currency auction held bids between N412.00 and N444.00 per dollar.

While other foreign currencies are appreciating, the dollar has remained strong, hitting N/$600 in the alternative market known as the parallel or black market.

The local currency depreciated by 1.69 percent to 600 naira to the dollar from 590 naira last week on the black market. The British Pound appreciated by N45 to close at N735 on Monday against N780 last month in the parallel market. In the same market, the euro strengthened by N40 as it closed at N610 on Monday from N650 per euro last month.

According to a CBN report, total foreign exchange sales to brokers licensed by the Central Bank of Nigeria (CBN) decreased by 3.6% to $5.15 billion in the fourth quarter of 2021, compared to the level of the quarter. previous.

Also Read: CBN and Others Outline Measures to Combat Fraud in the Payments Industry

A disaggregation showed that box office sales from investors and exporters rose 142.3% to $1.93 billion, from the previous quarter’s level, reflecting increased demand pressure. However, foreign exchange sales at the interbank window and at the secondary market intervention sales windows (SMIS) fell by 24.0% and 4.4% to $0.55 billion and 2 $.00 billion, respectively, from prior quarter levels, reflecting weaker demand.

Similarly, SME interventions and expired swap contracts also fell by 5.5% and 67.4% to US$0.38 billion and US$0.29 billion. , compared to the previous quarter.

CBN’s fourth quarter economic report showed average I&E segment revenue increased 14.9% to US$0.19 billion, from the previous quarter’s level, reflecting increased liquidity in the window, following an apex-backed FX intervention. bank.

In the money market, the overnight rate (O/N) fell 0.92% to close at 8.25% on Monday from 9.17% at the last close. Similarly, the Open Repo Rate (OPR) fell 0.83% to close at 7.83% from 8.66% the previous day.

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