Naira Capitulates at The Official Market Despite CBN’s Forex Interventions

Naira Capitulates at The Official Market Despite CBN’s Forex Interventions

  • The Naira has continued to capitulate in the official market to trade at N420.5 per dollar on Thursday, June 16, 2022
  • Information from FMDQ said that the currency went down by 0.12 per cent to close on a bad note on Thursday
  • At the parallel market, the naira exchanged for N607 per dollar, remaining the same as on Wednesday

Nigeria’s currency is finding it hard to square up to other international currencies, especially the dollar as it exchanged for N420 per dollar on Thursday, June 16, 2022, at the official market.

This is despite the Central bank of Nigeria’s continued intervention in the forex market.

Naira to dollar, Exchange rate, CBN
Naira falls again at the official market Credit: PIUS UTOMI
Source: Getty Images

Naira continuous fall causes inflation

Naira weakened against the dollar despite an improvement in the supply of forex in the official market. The exchange rate went down by 0.12 per cent to close at N420.5 per dollar in comparison to N420 per dollar at which it closed on Wednesday, June 15, 2o22, Nairametrics reports, citing information from the FMDQ website.

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Forex trading in the I&E window spiked by 9.41 per cent to $136.35 million from $124.62 million that passed hands.

External reserves depletes

At the parallel market, the exchange remained unchanged as of Thursday, June 16, 2022, closing at N607 per dollar, the same as was recorded at the trading session on Wednesday, June 15, 2022, according to Bureau de Change operators.

The exchange rate at the P2P market went up by 0.45 per cent on the morning of Friday, June 17, 2022, selling at N607 per dollar in comparison to N607.74 per dollar recorded on Thursday.

The country’s external reserve saw a marginal improvement on Wednesday, June 15, 2022, when it stood at $38.63 billion from $38.62 billion seen the previous day. The country’s reserves have been depleting due to CBN’s continuous intervention in the forex market to stabilise the naira.

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Dollar regains strength and pushes Naira towards N600 at the parallel market

Legit.ng reported that the dollar is roaring at the international market pushing many global currencies including the British pound.

Analysts have predicted that a stronger dollar may mean unpalatable news for the naira due to the US Federal Reserves’ aggressive stance and rebounding of the dollar.

All eyes will be on the US Federal Reserve this week as Jerome Powell, the Feds Chairman may announce a rate increase including new details on the $9 trillion balance sheet details and the unwinding plan.

Source: Legit.ng

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