Naira Falls at Official Market, Stable at Parallel as Okonjo-Iweala Set to Meet CBN Boss

Naira Falls at Official Market, Stable at Parallel as Okonjo-Iweala Set to Meet CBN Boss

- On Tuesday, Naira fell at the investors and exporters window but was stable at the black market

- Forex turnover declined to $32.33 million between Monday and Tuesday, as dollar scarcity continues in Nigeria

- WTO members are unhappy with Nigeria's multiple exchange rates, and Okonjo-Iweala has planned to meet the CBN boss over the matter

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Naira fell against the dollar at the investors and exporters window on Tuesday, declining by 0.21% below the N408.90 it closed with on Monday. The naira had closed at N409.75 to a dollar amid forex scarcity.

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The depreciation of the naira against the dollar showed an 85 kobo drop when compared to the previous day's value of Naira to a dollar.

During the trading day, Nigeria's legal tender had hit a high of N412 to one dollar, and also hit a low of N394 per one dollar, before ending Tuesday's trading with N409.75/$.

With the naira depreciating against the dollar, Nigeria's foreign reserve is depleting, as it dropped by 36.2% on Tuesday at the investors and exporters window.

According to FMDQ, forex declined from $50.67 million on Monday, to $32.33 million on Tuesday.

While naira depleted in the official market recognised by the Central Bank of Nigeria, it was stable at the black market. The parallel market reported a stable naira on Tuesday, which stood at N485 to a dollar.

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This was the same value the Nigerian currency recorded against the dollar during the preceding trading day. But the parallel market is not recognised, as the apex bank only considers the investors and exporters window, including its own rate as the official market price for naira and dollar exchange.

Nigeria has three exchange market rates, and the CBN has been planning to unify the multiple exchange rates.

However, the governor of the CBN, Godwin Emefiele, said the apex bank will only unify in line with the investors and exporters window, not the black market.

Naira Fall at Official Market, Stable at Parallel as Okonjo-Iweala Set to Meet CBN Boss
Naira Fall at Official Market, Stable at Parallel as Okonjo-Iweala Set to Meet CBN Boss. Photo: PIUS UTOMI EKPEI/AFP
Source: Getty Images

Emefiele said only illegal businesses trying to avoid regulatory requirements and oversight patronise the black market. But with the country still operating multiple exchange rates, members of the World Trade Organisation (WTO) have been complaining.

According to the WTO director-general, Ngozi Okonjo-Iweala, WTO members have concerns against the exchange rate system of the country, and Nigeria must explain why it allows the regime to continue unabated.

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Meanwhile, Legit.ng had reported that Okonjo-Iweala plans to meet with Emefiele during her one-week visit to Nigeria. She said the meeting with the apex bank boss will focus on the multiple exchange rate.

Okonjo-Iweala said as the WTO boss, she can't defend Nigeria when the members of the trade body complained of the country's multiple foreign exchange sources, so Nigeria's representatives will have to explain on behalf of the country.

Fakoyejo Olalekan is a Business and Financial Journalist with over three years of experience in covering finance and business activities within Nigeria and offshore. Prior to joining Legit.ng, he worked at Nairametrics where he wrote financial and investment analysis articles. Olalekan is a resourceful and result-driven journalist with a track record for conducting extensive research and interviews to produce articles that provide different perspectives to market activities.

Source: Legit.ng

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