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Conversion scale gains at NAFEX window as BDCs get further dollar Supply from CBN

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Forex turnover increased by 35% as Nigeria’s conversion scale at the NAFEX window acknowledged against the dollar to close at N385.80/$1 during intraday exchanging on Friday, October 2 after the public occasion.

Likewise, the naira stayed stable against the dollar, shutting at N465/$1 at the equal market on Friday, October 2, 2020, as the weight on the forex market dropped because of freedom day exercises and another round of dollar flexibly to Bureau De Change Operators.

Parallel market: At the black market where forex is traded unofficially, the Naira remained stable against the dollar to close at N465/$1 on Friday, according to information from Abokifx, a prominent FX tracking website. This was the same rate that it was exchanged for on Wednesday, September 30.

Current developments

  • The local currency has strengthened by about 7.8% within the last one week at the black market, as the CBN introduced some measures targeted at exporters and importers, in order 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 $250 million to BDCs since the 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 failed to sustain the initial gains made, after the CBN announced plans to provide liquidity.
  • BDC operators have urged the apex bank to reconsider the margin allowed for the currency traders, as it was inadequate to meet their expenses.
  • We also noted that forex traders monitored during the previous week, appeared to hoard forex, as they anticipated further depreciation in the market.
  • There has been a drop in speculative buying of foreign exchange, although demand backlog by manufacturers and foreign investors still puts pressure, and creates a volatile situation in the foreign exchange market.

NAFEX: The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Friday, closing at N385.80/$1.

  • This represents a 20 kobo gain when compared to the N386 that it exchanged for on Wednesday, September 30.
  • The opening indicative rate was N386.25 to a dollar on Friday. This represents a 34 kobo gain when compared to the N386.59 that was recorded on Wednesday.
  • The N392.51 to a dollar is the highest rate during intraday trading before closing at N385.80. It also sold for as low as N380/$1 during intraday trading

Forex turnover: Forex turnover at the Investor and Exporters (I&E) window, increased by 34.5% on Friday, October 2, 2020.

  • According to the data tracked  from FMDQ, forex turnover rose from $75.83 million on Wednesday, September 30, 2020, to $102.02 million on Friday, October 2, 2020.
  • The CBN had in the past few weeks moved to clear the huge backlog of foreign exchange demand, especially by foreign investors wishing to repatriate back their funds.
  • The drop in forex supply reinforces the volatility of the foreign exchange market. 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 $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
  • Total forex trading at the NAFEX window in the month of August was about $857 million, compared to $937 million in July.
  • According to Reuters, the naira could weaken at the black market this week following the cut in interest rate by the CBN after the MPC meeting to boost credit as it works to stimulate the Nigerian economy that is heading towards a recession.
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CURRENCIES

Naira stabilizes in forex markets as dollar supply hits record low during curfew

The naira remained stable against the dollar at the I&E window, closing at N385.75/$1.

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Forex turnover hit record low dropping by 81.5% as Nigeria’s exchange rate at the NAFEX window remained stable against the dollar to close at N385.75/$1 during intraday trading on Wednesday, October 21.

Also, the naira remained stable against the dollar, closing at N463/$1 at the parallel market on Wednesday, October 21, 2020, as the imposition of the curfew bits hard on businesses.

This is also as businesses shut down due to the outbreak of violence in some parts of the country including Lagos during the protest against the special anti-robbery unit (SARS) and police brutality by the Nigerian youth.

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 N463/$1 on Wednesday. This was the same rate that it exchanged for on Tuesday, October 20.

  • The local currency had strengthened by about 7.8% within the one week in September at the black market, as the CBN introduced some measures targeted at exporters and importers, in order to try to boost the supply of dollars in the foreign exchange market, and reduce the high demand for forex by traders. The measure
  • 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 Monday, closing at N385.75/$1.

  • This was the same rate that it exchanged for on Tuesday, October 20.
  • The opening indicative rate was N386.24 to a dollar on Wednesday. This represents a 14 kobo gain when compared to the N386.38 that was recorded on Tuesday.
  • The N386 to a dollar is the highest rate during intraday trading. It also sold for as low as N384/$1 during intraday trading.

Forex turnover: Forex turnover at the Investor and Exporters (I&E) window hit record low as it declined by 81.5% on Wednesday, October 21, 2020.

  • According to the data tracked  from FMDQ, forex turnover dropped from $32.67 million on Tuesday, October 20, 2020, to $6.05 million on Wednesday, October 21, 2020.
  • The CBN is still struggling to clear the backlog of foreign exchange demand, especially by foreign investors wishing to repatriate back their funds.
  • The continuous drop in forex supply reinforces the volatility of the foreign exchange market. 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.
  • As part of the measure to check forex abuse and check illegal transactions, the CBN last month directed the freezing of accounts of about 38 companies.
  • The average daily forex sale for last week was about $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
  • Total forex trading at the NAFEX window in the month of August was about $857 million, compared to $937 million in July.
  • The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand and a shaky economy that has been hit by the coronavirus pandemic.
  • According to Reuters, currency traders said that the naira is expected to be stable this week as banks limit foreign exchange transactions by both firms and individual buyers on the unofficial black market to curb speculation
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CURRENCIES

Exchange rate gains at NAFEX window as dollar supply improves significantly

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Forex turnover rose significantly by 464% as Nigeria’s exchange rate at the NAFEX window appreciated against the dollar to close at N385.67/$1 during intraday trading on Thursday, October 15.

Also, the naira remained stable against the dollar, closing at N462/$1 at the parallel market on Thursday, October 15, 2020 as BDC operators get another round of dollar supply from CBN

This is also despite the continuation of the protest against the special anti-robbery unit (SARS) by the Nigerian youth which has limited movement in major cities across the country especially Lagos.

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 N462/$1 on Thursday. This was the same rate that it exchanged for on Wednesday, October 14.

Current developments

  • The local currency has strengthened by about 7.8% within the last one week at the black market, as the CBN introduced some measures targeted at exporters and importers, in order 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 $450 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 failed to sustain the initial gains made, after the CBN announced plans to provide liquidity.
  • BDC operators have urged the apex bank to reconsider the margin allowed for the currency traders, as it was inadequate to meet their expenses.
  • We also noted that forex traders monitored during the previous week, appeared to hoard forex, as they anticipated further depreciation in the market.
  • There has been a drop in speculative buying of foreign exchange, although demand backlog by manufacturers and foreign investors still puts pressure, and creates a volatile situation in the foreign exchange market.

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

  • This represents a 16 kobo gain when compared with the N385.83/$1 that it exchanged for on Wednesday, October 14.
  • The opening indicative rate was N386.04 to a dollar on Wednesday. This represents a 34 kobo gain when compared to the N386.38 that was recorded on Tuesday.
  • The N392.78 to a dollar is the highest rate during intraday trading before closing at N385.67. It also sold for as low as N382/$1 during intraday trading.

Forex turnover: Forex turnover at the Investor and Exporters (I&E) window increased significantly by 464% on Thursday, October 15, 2020.

  • According to the data tracked  from FMDQ, forex turnover rose from $29.53 million on Wednesday, October 14, 2020, to $166.55 million on Thursday, October 15, 2020.
  • The CBN had in the past weeks moved to clear the huge backlog of foreign exchange demand, especially by foreign investors wishing to repatriate back their funds.
  • The huge increase in forex supply after yesterday’s drop reinforces the volatility of the foreign exchange market. 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 $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
  • Total forex trading at the NAFEX window in the month of August was about $857 million, compared to $937 million in July.
  • The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand and shaky economy that has been hit by the coronavirus pandemic
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CURRENCIES

Naira falls again at black market as #EndSARS protest limits movement.

Naira depreciated marginally against the dollar, closing at N462/$1 at the parallel market on Wednesday.

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Forex turnover declined by 63% as Nigeria’s exchange rate at the NAFEX window depreciated against the dollar to close at N385.83/$1 during intraday trading on Wednesday, October 14.

Also, the naira depreciated marginally against the dollar, closing at N462/$1 at the parallel market on Wednesday, October 14, 2020.

Nigerian Youth has been protesting demanding an end to SARS, the special anti-robbery unit of the Nigerian Police. Protest has limited movement in major cities across the country.

Parallel market: According to information from Abokifx, a prominent FX tracking website, at the black market where forex is traded unofficially, the Naira depreciated against the dollar to close at N462/$1 on Wednesday. This represents a N1 drop when compared with the N461 that it exchanged for on Tuesday, October 13.

Current developments

  • The local currency has strengthened by about 7.8% within the last one week at the black market, as the CBN introduced some measures targeted at exporters and importers, in order 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 $450 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 failed to sustain the initial gains made, after the CBN announced plans to provide liquidity.
  • BDC operators have urged the apex bank to reconsider the margin allowed for the currency traders, as it was inadequate to meet their expenses.
  • We also noted that forex traders monitored during the previous week, appeared to hoard forex, as they anticipated further depreciation in the market.
  • There has been a drop in speculative buying of foreign exchange, although demand backlog by manufacturers and foreign investors still puts pressure, and creates a volatile situation in the foreign exchange market.

NAFEX: The Naira remains stable against the dollar at the Investors and Exporters (I&E) window on Wednesday, closing at N385.83/$1.

  • This represents a 17 kobo gain when compared with the N386/$1 that it exchanged for on Tuesday, October 13.
  • The opening indicative rate was N386.04 to a dollar on Wednesday. This represents a 34 kobo gain when compared to the N386.38 that was recorded on Tuesday.
  • The N386 to a dollar is the highest rate during intraday trading. It also sold for as low as N380/$1 during intraday trading.

Forex turnover: Forex turnover at the Investor and Exporters (I&E) window declined further by 62.9% on Wednesday, October 14, 2020.

  • According to the data tracked  from FMDQ, forex turnover dropped from $79.53 million on Tuesday, October 13, 2020, to $29.53 million on Wednesday, October 14, 2020.
  • The CBN had in the past few weeks moved to clear the huge backlog of foreign exchange demand, especially by foreign investors wishing to repatriate back their funds.
  • The drop in forex supply reinforces the volatility of the foreign exchange market. 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 $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
  • Total forex trading at the NAFEX window in the month of August was about $857 million, compared to $937 million in July.
  • The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand and shaky economy that has been hit by the coronavirus pandemic
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