With a recent new supply of dollar to the Bureau De Change operators, the naira has lingered at a stable rate of N465/$1 against the US currency at the parallel market. This is the price at which it finished on Friday, October 2, 2020.
The exchange rate at the NAFEX window in Nigeria, however, advanced against the dollar on Friday when it closed at N385.80/$1. This is also visible with its forex turnover with a 34.5% increase from $75.83 million to $102.02 million in two days.
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Demand for the dollar which slowed down on October 1 due to the public holiday appears to resume after the next day.
Naira to Dollar Rates
Crude oil price in Nigeria continues to falter which could cause further disaster and pressure on the naira. Also with less and less foreign investors and even more drawing their funds from the country, fx market volatility strengthens.
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Having cut the monetary policy rate from 12.5% to 11.5% to force stability from within, and avoid its dependence on foreign investors, the CBN expects to introduce more liquidity in the forex market.
Over the last weeks and since its resumption of forex sales at the beginning of September, Bureau de Change operators have bought at least $200 million from the CBN.
The exchange rate of naira against the dollar isn’t upholding its initial gains especially as soon as the CBN talked about the introduction of liquidity.
The MPC meeting for September 21 ended with the CBN cutting the interest rate in hopes to drive the Nigerian economy which is now facing a recession. Reuters is forecasting a weak naira at the parallel market in the coming week which will be influenced by the cut in interest rate by the CBN.
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