The naira gained ground against the dollar to close at N465/$1 on Monday at the parallel market as speculators continue to sell off on account of recent Central Bank of Nigeria decision to resume forex sales to Bureau De Change operators.
This represents a N12 gain when compared to the N477/$1 that it exchanged on Friday, August 28.
The exchange rate at the NAFEX window, however remained stable at N385.67 during intraday trading on Monday,
Forex turnover at the Investor and Exporters (I&E) window rose by 19% on Monday, August 31, 2020, after the gain that was recorded the previous trading day.
According to the data from FMDQ, forex turnover rose from $12.09 million on Friday, August 28, 2020, to $14.37 million on Monday, August 31, 2020.
The increase is coming after the previous trading day drop in forex turnover following dollar scarcity.
This highlights the continued volatility of the foreign exchange market and the scarcity of the greenback. The supply of dollars has been on a decline for months due to low oil prices and the absence of foreign capital inflow into the country.
The average daily forex sale for last week was about $71.13 million which represents a significant increase from the $24 million that was recorded the previous week. The day’s FX turnover is still a far cry from the $200 million mark that was recorded sometime last week.
Total forex trading at the NAFEX window in the month of July was $937 million compared to $875 million in June.
The exchange rate disparity between the official NAFEX rate and the black-market rate remained as wide as N79.33. The country maintains multiple exchange rates comprising the CBN official rate, the BDC rates, SMIS, and the NAFEX (I&E window). The wide disparity between the 2 rates has created huge arbitrage opportunities for some highly connected individuals.