Dollar To Naira Exchange Rate: Cost Of Dollar, Euro Drops, As Forex Demand Falls Below $4 billion In H1

July 1, 2022: Nigerian currency, Naira, appreciated against the Dollar, Pound and Euro in the official foreign exchange market, Investors & Exporters window on Friday, FMDQ, has reported in its forex data.

The US currency had sold for N425.05 on Thursday, but it closed Friday with N425 in the Investors and Exporters window, which is domiciled on the FMDQ platform. This is a slight appreciation of 0.01%.

At the end of business hour on July 1, the Pound Sterling had also fallen to the Nigerian currency, losing N5.26 in value, as traders parted with the United Kingdom legal tender at the cost of N500.65/£1, having exchanged for N505.91/£1 the previous day.

The Euro followed the same path, as the Naira posted gains against the European Union currency, with the foreign note shedding N3.56 from the N437.59/€1 they exchanged for on Thursday, with the Naira appreciating to N434.03/€1.

This comes amid marginal increase in demand for the foreign currencies, as the FMDQ reported that $78.86 million was traded on the official forex market on Friday. A day before, over $76.64 million was the value of trades, which is $2.22 million difference.

In a broader view, FMDQ disclosed that in the last six months, over $20.23 billion was traded on the Investors and Exporters window, in contrast to the $10.34 billion recorded as turnover for the First Half (H1) of last year.

In respect to Quarter-on-quarter 2022, the official market experienced a drop in trade value, as it recorded $11.9 billion in Q1 this year, while Q2 fell short of that level, settling at $8.33 billion.

The dip in trades by investors and exporters was felt within the six months of H1, as January recorded $3.22 billion, but February reported $2.13 billion, but trade value rose to $6.55 billion in March, before falling again to $2.63 billion in April.

In the month of May and June, investors and exporters traded $2.5 billion and $3.2 billion respectively, reflecting demands are still low when compared to the figure in March this year.

This means in each month, excluding March, demands for forex was below $4 billion.

Mixed reactions in forex black market

The Naira extended its gain streak in the Bureau De Change market, as BDC operators reduced their asking price for one Dollar to N607 on Friday, against the N612 both currencies exchanged for a day before.

However, the peer-to-peer market didn’t share the same sentiment, as the Naira and dollar exchanged at a higher rate of N619/$1 on July 1, having traded at N613 on June 30.