Naira depreciates to N762/$ at official market

The naira yesterday depreciated to N762/$ at the Investors and Exporters (I&E) window.

The closing rate represents N20/$ crash from Wednesday’s N741/$ rate.

According to report from FMDQ Exchange, the naira opened at N762/$ and traded tightly around the rate before relapse, and posted cumulative transaction turnover of $98.6 million.

Market reports showed the naira exchanged at N778/$ at the parallel market, leaving N16/$ gap between the official and parallel market rates.

Analysts also said that Monday’s low closing rate at the I&E window attracted forex buyers interested in getting the greenback at cheaper rates to that segment of the market.

The Central Bank of Nigeria (CBN) unified all exchange rates into the I&E window and allowed market forces to determine exchange rate for the naira.

President, Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe, said all eligible forex demands are now queuing at the I&E window in the short run hence the high transaction traffic there.

“The development is not new as there were times when official exchange rate was higher than the parallel market rates in China. The interplay of supply and demand forces and the concept of willing buyer and willing seller will eventually lead to a stable market clearance rates as events unfold,” he said.

Gwadabe advised the CBN to ensure liquidity in the retail end of the market by de-monopolizing diaspora remittances and stronger collaboration with BDCs which control the retail end of the forex market.

Other market analysts from FutureView Securities said forex unification hopes are also being frustrated by the sustenance of the list of 43 items restricted from accessing forex at the official market. 

Originally compiled by the CBN in June 2015, the list of items ineligible for forex was intended to manage foreign exchange resources and encourage domestic production.

Peoplesmind