On Tuesday, the naira fell to a six-month low of N1,656.49 per dollar in the official foreign exchange (FX) market, owing to high demand for the greenback from end users.
Due to dollar shortages, the naira/dollar exchange rate peaked on February 23, 2024, at N1,665.50/$. That day’s turnover amounted to $151.93 million.
On Tuesday, September 17, the naira lost 6.6% of its value when the dollar was valued at N1,656.49. This was the first trading day after the public holiday on Monday.
According to information from FMDQ Securities Exchange Limited and the Nigerian Autonomous Foreign Exchange Market (NAFEM), the dollar was quoted at N1,546.41 on Friday.
On Tuesday at NAFEM, the dollar the willing sellers and purchasers provided printed at $100.39 million. The market summary indicates that the intraday low was quoted at N1,565, while the intraday high ended at N1,656.49.
The dollar sold at N1,660 on Tuesday compared to N1,665 closed on Friday at the parallel market, often known as the black market, meaning that the local currency increased by N5.
The CBN announced on Tuesday the rules for international trade, exchange, credit, and monetary policy for 2024 and 2025. These guidelines set the expectations for banks and other financial institutions under its purview.
The CBN claims that the prohibition on 43 goods accessing funds in the Nigerian Foreign Exchange Market has been removed. As a result, importers can obtain foreign currency from the market to cover the cost of importing their goods.
Authorized dealers cannot hold long positions after each trading day under approved Foreign Currency Trading Position (FCTP) restrictions.
According to the document, the Price Verification System (PVS) is a program designed to solve problems with importers’ excessive invoicing, which puts pressure on the foreign exchange market. Launched on August 31, 120, the portal is classified as confidential until 2023. As such, the PVS Report is now a required trade document to submit Form M.
Through the circular titled “Operational Mechanism for Bureau De Change Operations in Nigeria,” referenced as TED/FEM/PUB/FBC/001/007 and dated August 17, 2023, the CBN introduced new guidelines aimed at improving efficiency in the operations of the Bureau De Change (BDC) segment of the foreign exchange market.
According to these standards, BDC operators can use the spread for buying and selling, which should not exceed -2.5 percent to +2.5 percent of the previous day’s window-weighted average rate on the Nigerian foreign currency market. Furthermore, BDC operators must now use the Financial Institution Forex (FIFX) rendition system to submit daily and monthly results.
International Money Transfer Operators (IMTOs) must quote rates for transactions that fall between the allowable range of -2.5 percent and +2.5 percent based on the closing rate of the Nigerian foreign exchange market the day before.
