Friday saw a flat exchange rate of the naira at 1, 380 as the black market, or parallel market, is affected by the scarcity of dollars.
Due to rising demand, some dealers on Friday offered one dollar for between N1,410 and N1,280 in various parts of the nation. “The dollar is scarce in the market and demand is very high,” a trader told The News Chronicles on Friday.
According to the merchant, importers and those in need of dollars for personal or business trips are the main sources of demand.
The dollar was quoted at N1,402.67 on Thursday compared to N1,390.96 closed on Tuesday before the workers’ holiday, according to statistics from the FMDQ Securities Exchange Limited. The naira likewise closed flat at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
There were significant changes in currency values during the NAFEM window. The intraday high on Thursday closed at N1,445, indicating a minor decrease from the value of N1,450 on Tuesday. In the meantime, there was a more notable decline in the intraday low, which dropped from N1,200 on Tuesday to N1,299 on Thursday.
The Central Bank of Nigeria (CBN) has implemented a number of steps to increase liquidity in the foreign currency (FX) market, but the pressure on the naira has continued.
The naira was the world’s best-performing currency in April, thanks to a positive sentiment expressed by major foreign investment institutions.
“Our FX market is enjoying strong activity, with turnover approaching levels not seen in over seven years. The increase in liquidity fosters trust among investors, companies, and other stakeholders, guaranteeing smoothness in their dealings with Nigeria’s foreign exchange markets,” as stated by CBN governor Olayemi Cardoso in a statement last month.
“It might even be that we cannot afford to leave the currency floating, especially given the imperfections that we have in the economy,” stated Muda Yusuf, CEO of the Promotion of Private Enterprise.
The dollar index, which tracks how the US dollar performs versus six major currencies, saw a sharp drop, falling to roughly 105.2 index points, its lowest level since April 11. This negative trend represents a 1% weekly loss, suggesting that the dollar may suffer its biggest weekly loss in almost two months.
