On Wednesday, the naira gave up some of its recent gains versus the dollar on the parallel market, owing to the country’s continued scarcity of the greenback.
On the parallel market, the local currency slipped to 515 versus the dollar from 510 on Tuesday.
After dropping to 525/$ on the parallel market on July 28, a day after the Central Bank of Nigeria ceased selling foreign money to Bureaux de Change, the naira strengthened to 506/$ on August 4. In recent days, it had been hovering around 508/$ and 510/$.
Mr. Godwin Emefiele, the Governor of the Central Bank of Nigeria, announced the suspension of forex sales to BDCs on July 27 at the end of the Monetary Policy Committee meeting, claiming that they had become “agents that facilitate graft and corrupt activities of people seeking illicit fund flow and money laundering in Nigeria.”
He stated that the CBN would divert a large amount of its weekly allocation now allocated to BDCs to commercial banks in order to meet legitimate forex demand from ordinary Nigerians and companies.
According to FMDQ Group, the naira increased by 0.02 percent at the Investors and Exporters market on Wednesday, closing at 411.40/$.
According to data from FMDQ Securities Exchange Limited, foreign exchange transactions in the I&E window fell 17.2 percent last week.
Last week, the overall value of transactions at the I&E window was $489.85 million, down from $590.34 million the week before.
According to the FMDQ data, currency turnover at the window, which handles more than half of Nigeria’s FX transactions, decreased to $2.81 billion in July from $3.01 billion in June.
The total turnover in the FX spot and futures markets was $677.44 million, down 24.93 percent ($225.01 million) from the previous week’s $902.45 million.