CBN pumps $50 million To test FX market

CBN FX market
CBN pumps $50 million To test FX market

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.

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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.

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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.

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