Following low Foreign Exchange, Forex inflow due to low oil prices triggered by the coronavirus pandemic, Forex turnover dropped by 63.7% while the exchange rate at the Importer and Exporter {I & E } depreciated for a third consecutive trading day.
The turnover at the (I&E) window recorded a decrease on Friday, July 17, 2020, as it dropped by 63.7% day on day. It dropped from $102.13 million on Thursday, July 16, 2020, to $37.04 million on Friday, July 17, 2020. The low turnover which has become a huge challenge reaffirms the scarcity of dollars and an indication of the liquidity pressure in the foreign exchange market.
This is reflected in the fall in the exchange rate. The turnover also falls short of $200 million recorded at major trading days during the last few weeks.
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At the Investors and Exporters (I&E), the Naira depreciated marginally against the dollar at the window on Friday by 50 kobo, closing at N388.50/$1, compared with the N388 that was reported on Thursday, July 16. The opening indicative rate was N388.07 to a dollar on Friday. This represents an 11 kobo drop when compared to the N387.96 to a dollar that was recorded on Thursday.
At the Parallel Market where forex is traded unofficially, the Naira remained stable again closing at N470 to a dollar on Friday.
Recall that Nigeria maintains multiple exchange rates comprising the Central Bank of Nigeria, CBN official rate, the Bureau de Change, BDC rates, Secondary Market Intervention Sales, SMIS, and the Nigerian Autonomous Foreign Exchange Rate, NAFEX also known as the (Importer & Exporter Window).
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Recall also that the Central Bank of Nigeria, CBN has continued to intervene in the Forex market to stabilize the Naira, after the Naira weakened against the dollar by 1.14% amidst uncertainty.
According to a recent report from FSDH research, the forex inflows into the I&E window reduced significantly in the second quarter of 2020 on the back of lower foreign portfolio inflows.
