Naira weakened against the U.S. dollar at the Investors and Exporters (I&E) window of the foreign exchange (forex) market on Monday, falling to N386.50 a dollar.
It shed N0.75 against the dollar compared to the N385.75 at which the hard currency exchanged during the previous trading session.
The rate of exchange at the I&E window differs from the Central Bank of Nigeria’s published rate, which is currently N360/$1. It also varies from the exchange rate at the parallel market, which stood at N450 to a dollar on Monday according to exchange rate platform, AbokiFX.
According to the daily trading data from FMDQ (where forex is traded by importers and investors), Naira improved by N0.96 against the dollar, closing at N386.50 to a dollar relative to the indicative opening rate of N387.46 to a dollar at which it opened on Monday.
The opening indicative rate on Monday implied a modest gain of N0.04 over the N387.50 at which it opened on Thursday.
The turnover for the day according to the FMDQ rose by 14.62% to $14.27 million from the $12.45 million posted the session before.
Read also: Naira gains against U.S. dollar at I&E forex window
Meanwhile, Naira remained stable for the third straight day at the black market, exchanging for N450 to a dollar.
The stability of the local currency at the parallel market can be linked to a fall in forex demand particularly by speculators at the market.
Even though Naira has been touching record lows at the black market and over-the-counter spot market since the rate adjustment by the central bank in March, analysts do not anticipate considerable change in exchange rates in the coming week as there are no strong fundamentals to trigger such changes.
Going by the Medium Term Expenditure Framework and Fiscal Strategy (MTEF/FSP) issued by the Federal Ministry of Finance, Budget and National Planning, the exchange rate may be devalued further to help reduce the wide discrepancy in the forex market.
Opinions