Naira To Dollar: Naira Gains At Black Market As Dollar Demand Reduces

As demand for foreign exchange drops, the Naira to dollar exchange rate rose significantly at the parallel market, making Naira gains significantly — ending at N465/$1 at the black market on Thursday.

Brandnewsday understands that the Forex turnover dropped by 16%, as Nigeria’ Naira exchange rate at the Nigerian Autonomous Foreign Exchange (NAFEX window) remained steady against the dollar to close at N392/$1 during intra-day trading on Thursday, December 24, 2020.

In information obtained from Abokifx — a prominent FX tracking website, at the black market where forex is traded unofficially, the Naira appreciated against the Dollar to close at N465/$1 on Thursday – an N10 gain when compared with the N475/$1 that it exchanged for on Wednesday, December 23.

In the same hand, the measure put in place by the Central Bank of Nigeria (CBN) aimed at exporters and importers as help shaped Nigeria’s currency’s recovery by about 7.8% within one week in September at the black market. This effort is to intensify the circulation of dollars in the foreign exchange market, it will consequently 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.

Brand News Day had reported that the CBN recently sold over $1 billion to BDCs since they resumed forex sales on Monday, September 7, 2020.

Naira to dollar exchange rate

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.

READ: Naira Exchange Rate News: Naira Exchange Rate, Tuesday, December 22, 2020

Meanwhile, the CBN’s intervention, the huge demand backlog by manufacturers and foreign investors still put pressure and creates a volatile situation in the foreign exchange market.

The Naira remained stable against the dollar at the Investors and Exporters (I&E) window on Thursday, closing at N392/$1.

This was the same rate that it exchanged for on Wednesday, December 23.