Naira weakens to 1,479/dollar as supply dwindles

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The total value of transactions recorded at the official Nigerian Autonomous Foreign Exchange Market fell from $465.29m on Tuesday and $203.93m on Wednesday, data obtained from FMDQ Exchange showed on Thursday.

This indicates a 56 per cent drop in the value of transactions recorded on the FMDQ platform which records volume and value of transactions on NAFEM, the official FX market.

This drop in FX transaction came on the heels of a steady increase in the value of FX transactions on the platform, following a series of circulars issued by the Central Bank of Nigeria.

The CBN had last week issues circulars compelling banks to sell their excess dollar holdings, among others.

It also issued directives asking banks and FX dealers to report correct and transparent FX trading data.

Meanwhile, the naira fell by 1.4 per cent to the dollar at the parallel market on Thursday, following strong demand for dollars.

It traded at the rate of N1,480/$, N20 weaker than N1,460/$ quoted on Wednesday at the black market.

Bureau De Change operators speaking with The PUNCH said the rate had remained on a steady increase throughout the week.

Abdulahi Taura, a BDC operator, said the dollar was rising owing to a consistent demand for the greenback.

“The dollar has increased to N1,480. People are still demanding it and that’s why it’s increasing.”

Another BDC operator, Ibrahim Yahu, said the greenback was sold at the closing rate of N1,482.

“Today, we closed at the rate of N1,482 to the dollar. If there is no demand, prices will certainly come down but our consistent thirst for the dollar is making it to rise gradually against the naira.”

At the official market, the naira further weakened against the United States dollar, according to data posted on the FMDQ Exchange website.

It closed at N1479.47/dollar, compared to N1434.53/dollar recorded on Wednesday.

Meanwhile forex turnover has taken a downward trend in the last two days.

Checks by our correspondent showed that the value of foreign exchange transactions recorded on the official Nigeria Autonomous Foreign Exchange Market had reduced from $584m on Monday to $465.29m on Tuesday and $203.93m on Wednesday. The turnover for Thursday was yet to uploaded as of 8:15pm when this report was filed.