Naira – The exchange rate at the parallel market fell to another new 3-year low on Friday closing at N465/$1. However, on the officially recognized NAFEX Market, the Forex turnover was somewhat stable with only a slight drop of 0.08% on Friday as the exchange rate was weakened to N387/$1.
Parallel Market: At the black market where forex is traded unofficially, the Naira depreciated by N2 to a dollar to close at N465 to a dollar on Friday, as against the N463 to a dollar on Thursday, another new 3-year low for the Naira. The exchange rate at the beginning of the week was N461 to a dollar. The drop is due to pressure on the black market as a result of scarcity of dollars, especially at the official. This has made most businesses to source for their foreign exchange at the black market.
NAFEX: The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Friday, closing at N387 to a dollar, compared to the N386.50 that was reported on Thursday, July 9, representing a 50 kobo drop. This is as traders are still confused over CBN’s adjustment of the exchange rate at the SMIS window. The opening indicative rate was N386.13 to a dollar on Friday. This represents an 83 kobo gain when compared to the N386.96 to a dollar that was recorded on Thursday.
Nigeria maintains multiple exchange rates comprising the CBN official rate, the BDC rates, SMIS, and the NAFEX (I&E window). Nairametrics reported last week that the government has set plans in motion to unify the multiple exchange rates in line with requirements from the World Bank. Nigeria is seeking a world bank loan of up to $3 billion. The country has been under pressure from the International Monetary Fund and the World Bank for currency reforms.