Naira Ends August Negative, Loses N28.56 At Official Market Despite CBN Intervention

Nigerian currency, the naira, closed the month of August on a negative note in the foreign exchange market as it recorded a loss of N28.56 at the official market.

According to data from the FMDQ Securities and Exchange, the official trading platform of the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira had on the first trading day in August, recorded N1,570.00 per dollar. The NAFEM data show that naira closed trading on Friday, 30 August (which is the last trading day in the month at the official market) at N1,598.56. This represents 1.9 The per cent when compared to N1,570 per dollar at the beginning of the month.

Prime Business Africa’s analysis of data published on the FMDQ Securities and Exchange platform shows that dollar transactions (as per FX turnover) increased within the last one month. The record shows that it rose from 142.32 million at the beginning of the month to $172.80 million on Friday. This reflects 21.42 per cent increase.

The data on the FMDQ Securities and Exchange platform also show an intraday day high of N1,610.50/$1 and a low of N1,511.00/$1 on Friday.

On a day-on-day basis, the naira fell by 0.29 per cent (N4.63) at NAFEM, with the dollar trading at N,1598.56 on Friday as opposed to N1,593.93 on Thursday.

The daily foreign exchange turnover rose by 11.11 per cent to $172.80 million on Friday, up from $155.52 million on Thursday.

CBN Intervention

The naira recorded losses at the end of the month of August despite the intervention of the Central Bank of Nigeria (CBN). The CBN sold over $1.7 billion through the Retail Dutch Auction System (RDAS) within the month. The aim was to reduce pressure in the FX market and stabilize the naira’s exchange rate.

READ ALSO: CBN’s FX Market Intervention Falls Short As Naira Struggles To Gain Ground

The RDAS involved authorised dealer banks submitting a detailed list of outstanding FX demands from their end users.  After close of submissions, the apex bank reviewed and announced authorised dealer banks that were successful in the bidding and end users that got dollars through them.

However, this measure only recorded temporal relief on the naira. As the exchange rate between naira and dollar both at the official and parallel segments of the FX market went up just after one week.