On Monday, the Central bank of Nigeria, CBN pumped in $50 million into the FX market in a bid to test demand and supply and more importantly, the price of naira against the dollar.
According to Reuters, $50 million was sold to foreign investors on the spot and forward market in what it termed a “test trade to gauge the level of dollar demand” in the market.
The exchange rate has fallen from N477/$1 on Friday to as low as N440/$1 on the average across parallel markets as forex speculators scamper to take profits ahead of further dollar liquidity in the system.
Nigeria’s exchange rate at the NAFEX window remained stable at N386 during intraday trading on Wednesday, September 2, 2020.
In a related development, the exchange rate at the parallel market also remained on Wednesday as it closed at N440/$1 after yesterday’s significant gain.
At the black market where forex is traded unofficially, the Naira remained stable against the dollar to close at N440/$1 on Wednesday, according to information from Abokifx, a prominent FX tracking website. This was the same rate that it exchanged on Tuesday, September 1.
Forex turnover at the Investor and Exporters (I&E) window declined by about 34% on Wednesday, September 2, 2020, after 2 consecutive days of increased turnover.
According to the data tracked by Nairametrics from FMDQ, forex turnover dropped from $58.46 million on Tuesday, September 1, 2020, to $38.46 million on Wednesday, September 2, 2020.