Exchange Rate Stabilizes Across Forex Markets As CBN Intervenes

At the black market, the Naira remained stable against the dollar to close at N465/$1 on Tuesday.

Forex turnover rose by 173% as Nigeria’s exchange rate at the NAFEX window remained stable against the dollar to close at N385.67/$1 during intra-day trading on Tuesday, November 10.

Also, the naira remained stable against the dollar, closing at N465/$1 at the parallel market on Tuesday, November 10, 2020, as Bureau De Change operators get another round of dollar supply from the Central Bank of Nigeria.

Parallel market: According to information from Abokifx – a prominent FX tracking website, at the black market where forex is traded unofficially, the Naira remained stable against the dollar to close at N465/$1 on Tuesday.

This was exactly the same rate that it exchanged for on Monday, November 9.

  • The local currency had strengthened by about 7.8% within one week in September at the black market, as the CBN introduced some measures targeted at exporters and importers.
  • This was so as to try to boost the supply of dollars in the foreign exchange market, and reduce the high demand for forex by traders.
  • The CBN has sold over $500 million to BDCs since they resumed forex sales on Monday, September 7, 2020.
  • This was expected to inject more liquidity to the retail end of the foreign exchange market and discourage hoarding and speculation.
  • However, the exchange rate against the dollar has remained volatile after the initial gains made, following the CBN’s resumption of sales of dollars to the BDCs.
  • The President of the Association of Bureau De Change Operators, Aminu Gwadebe, said he expects the impact of the extra liquidity in the market to be gradual.
  • Despite the drop in speculative buying of foreign exchange, the huge demand backlog by manufacturers and foreign investors still puts pressure and creates a volatile situation in the foreign exchange market.

NAFEX: The Naira remained stable against the dollar at the Investors and Exporters (I&E) window on Tuesday, closing at N385.67/$1.

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