Fakoyejo OlalekanJuly 4, 2022 Forex Update: The value of the United States currency, dollar, grew against the naira on Monday across the official foreign exchange market and the black market, as supply of the greenback falls.
The cost of dollar rose by 0.18% at the end of business hour on Monday, as $1 was sold for N425.75 in the Investors and Exporters (I&E) window, which is the official forex market on the FMDQ platform.
However, the naira had exchanged for the dollar at the rate of N425/$1 the session before. The hike in value shows demand remains above availability, considering $47.56 million was exchanged on Monday, -39.69% below what was traded during the previous session.
The depreciation of the naira extended into the Bureau De Change section, as dollar was put on sale for N613/$1. This is 0.16% higher than the N612/$1 both currencies exchanged for on Friday.
In the peer-to-peer market, the situation was similar, with sellers willing to let the dollar go for N616.49/$1 early Tuesday, hiking the cost of the United States legal tender from N615.9/$1 previously reported on Monday morning.
With the Nigeria’s external reserves at $39.17 billion as at Friday, July 1, 2022, the country doesn’t have enough forex to go round or meet the rising demands to finance import trades, hence, the Central Bank of Nigeria (CBN) creating bottlenecks in accessing FX.
The financial regulator has limited supply to only essential goods, as well as foreign tertiary fee for Nigerian students studying abroad. This has left other individuals and businesses trading goods not considered essential, to depend on the black market for forex.
CBN’s policy to tighten forex access amid limited availability has caused the cost of dollar and other foreign currencies to skyrocket, with buyers paying a premium to obtain FX in the unregulated foreign exchange market.
This has also affected foreign corporations trying to repatriate their earnings to their parent company’s country.
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