July 6, 2022 Dollar Rate Update: The value of the naira closed upward on Wednesday, rising by 0.52% at the end of business hour in the Investors and Exchange window, halting its loss, which was driven by shortage of dollar in the forex market.
Nigeria’s currency exchanged for one dollar at N427.75 on the official market, against the N430 the United States currency sold for the previous day. This reflects demand pressure is wearing off on the greenback and restoring value for the naira.
Note that during trading, the local currency had exchanged for dollar at a high of N431 before reversing the exchange rate down to N427.75. This occurred after supply reached $81.64 million on Wednesday, in contrast to the $47.56 million that was supplied to the official market the previous day.
But the naira failed to replicate similar performance in the black market. Forex sellers upped their asking price to sell one dollar by 0.48%, raising the exchange rate to N616 on Wednesday, as the Nigerian currency depreciated from N613/$1.
The peer-to-peer market was not different, with traders demanding N618 earlier on Thursday, against the N617/$1 reported on Wednesday. This shows forex remains scarce in the black market, as Central Bank of Nigeria (CBN) continues to starve the parallel market of foreign currencies.
CBN had taken the action over claims that Bureau De Change operators are using their access to the financial regulator’s forex reserves to facilitate money laundering. He said the operators are operating outside their purpose of creation, hence, blocking them from obtaining forex from the banks.
The Bureau De Change operators have denied the allegation, stating that the apex bank was quick to label then wrongly. The association said they remain focus on their activities, hoping CBN will reverse the ban to allow BDC help to clear the scarcity that is allowing Nigerians to buy the forex at a premium price.