Nigeria’s FX Crisis Will Continue Until We Scale Up Production For Export’

Investors, Exporters Buy Dollars At Lower Rate, As Naira Value Rises

1 min read

In the official market on Thursday, 19 May, traders saw the foreign exchange (Forex) rate between the Naira and the Dollar end at N463/$1.

This contrasted with the N465.13/$1 both currencies traded at the close of the session on Wednesday, indicating the Naira appreciated in value by  N2.13 kobo or –0.45 per cent.

Prime Business Africa learnt that prior to the Dollar rate halting at N463/$1, foreign exchange traders were charged a high price of N467/$1 and a low rate of N460/$1 during the session. 

It’s unknown if the fluctuation hurt transactions, but according to data from the FMDQ Exchange, the value of foreign exchange transacted on Thursday fell.

FMDQ Exchange disclosed that in the investors’ and exporters’ window of the official market, forex traders transacted $104.24 million in foreign exchange.

When the value of transactions at the end of trading is compared to the $267.04 million recorded the day before, investors’ and exporters’ purchases dropped by $162.80 million or –60.9 per cent. 

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Note that Wednesday was the first time the value of foreign exchange transacted in the investors’ and exporters’ surpassed the $200 million mark this week. 

On Monday, the investors’ and exports’ window recorded the lowest drop in foreign exchange transactions, having closed with $55.10 million. 

The next day, traders in the official market saw supply increase to $127.72 million, making it the second-highest forex transaction so far this week. 

Meanwhile, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has stated that domestic prices remain exposed to exchange rate pressure amid forex scarcity.

The MPC said the CBN’s RT200 FX programme, Naira-4-dollar and other forex policies have the potential to attract diaspora remittances and increase foreign reserves.

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“The Committee also considered the continued impact of exchange rate pressure on domestic price levels and called for policies to attract both portfolio and foreign direct investment to Nigeria. 

“It maintained optimism that, the continued progress made with the RT200 FX programme, Naira-4-dollar and other policies targeted at attracting diaspora remittances, would continue to help improve accretion to the external reserves and improve liquidity in the foreign exchange market,” the CBN said in its communique released this week, which covered the comments of the MPC during their meeting in March.

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