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    Saturday, August 5, 2023

    Naira Falls to N895/$ on Demand Pressure

    Naira on Friday fell to N895 per dollar, the lowest ever as demand for the greenback continued to rise at the parallel market, also known as the black market.

    The foreign exchange (FX) market closed on Friday with naira depreciating by 1.12 percent to N895 per dollar on Friday from N885/$1 on Thursday at the black market.

    Traders attributed the naira depreciation to strong demand for dollars by individuals who wanted to travel for business or school.

    “Many people are traveling outside the country and they come to buy dollars”,” Abubakar, a black market operator at CMS said.

    The naira is expected to cross the N900/$ threshold before recovering, said Bismarck Rewane, managing director/chief executive officer of Financial Derivatives Company Limited.

    At the Investors’ and Exporters’ (I&E) forex window, Nigeria’s official foreign exchange market, naira appreciated by 4.30 percent as the dollar was quoted at N743.07 on Friday as against N776.50 quoted on Thursday, data from the FMDQ showed.

    Willing buyers and sellers maintained bids as high as N799 per dollar on Friday, which was stronger than N804/$1 on Thursday, but slightly weaker than N799.50/$1, on Friday last week.

    The market auction also recorded lower bids of N475, stronger than N700 per dollar on Thursday and Tuesday, but weaker than N465.00 bid on Friday last week at the I&E window.

    On a weekly basis at the I&E window, activity level declined 10.1 percent ($43.7m) to $389.1m and the base currency (dollar) rose 0.1 percent w/w against the price currency (Naira) to N776.50/$1.00.

    In the parallel market, the dollar appreciated 2.3 percent w/w against the Naira to N890.00/$1.00.

    “We observed that the spread between both FX rates deflected from last week’s thin course, as the weekly average expanded by 25.7 percent to N111.9,” analysts at Afrinvest Securities Limited said.

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