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Market Digest Nigeria

Finance

Naira gains 0.02% to dollar

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Naira gains 0.02% to dollar as CBN defends currency with $27.84 billion

naira

Nigeria’s currency (Naira) on Thursday strengthened marginally by 0.02 percent at the Investors and Exporters (I&E) forex window.

Naira closed with the dollar quoted at N409.67k as against N409.75 on Wednesday according to data from the FMDQ Security exchange.

The naira appreciation was attributed to moderation in demand for dollars by the end users.

On Thursday, the daily foreign exchange market turnover declined by 33.88 percent to $98.20 billion from $148.54 million recorded on the previous day.

During trading, bids for dollars were maintained between N394 and N412 per dollar.

However, at the black market, the Naira rate to a dollar remained unchanged at N485 according to data posted by Aboki FX.

Therefore, the difference between official and unofficial market is still above N75.

Meanwhile, as part of efforts to ensure the stability of the naira, the Central Bank of Nigeria has revealed that in 2020, $27.84 billion was sold in foreign exchange market.

The sales were made to Bureau de Change, I&E, Interbank, SME intervention and the Secondary market Intervention Sales.

This was disclosed in the Q4 2020 economic report published on Thursday.

According to CBN, $5.62 billion were sold in the fourth quarter of 2020 an increase of 28.7% from $4.37 billion recorded in the third quarter.

In the second quarter, CBN sold $4.47 billion and the sum of $13.38 billion were sold to Forex dealers in the first three months of 2020.

Disaggregation of the 2020 fourth quarter sales showed that BDC sales and I&E sales rose to $1.36 billion and $1.62 billion from $340 million and $390 million, recorded respectively, in the preceding quarter.

Similarly, Interbank sales and SME intervention increased by 12.2 percent and 3.1 percent to $160 million and $310 million, respectively, from the levels recorded in Q3 2020.

While, the Secondary market Intervention Sales (SMIS) and matured swap transactions, however, fell by 12.8 percent and 62.9 percent to $1.71 billion and $460 million, compared to the previous quarter.

CBN in its report noted that it has continued to maintain its periodic interventions in the foreign exchange market to boost liquidity, enhance access to foreign exchange, curb unbridled demand and ensure stable exchange rate.

 

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