One dollar traded at the rate of N930 on Friday, which was
lower than N917 traded at the beginning of the trading week at the black
market.
The continued loss in the value of the naira followed
scarcity of dollars occasioned by low inflows from oil receipt, foreign capital
and Diaspora remittances among others, according to analysts.
At the Investors’ and Exporters’ (I&E) forex window,
naira appreciated by 4.53 percent as the dollar was quoted at N736.62 on
Thursday compared with N771.59 on Wednesday and also higher than N744.97 quoted
on Tuesday, data from the FMDQ indicated.
Nigeria’s Central Bank on June 14, 2023 collapsed all
segments of foreign exchange markets into the I&E forex window.
“Although the exchange rate has shown some volatility
(depreciated from N435/1USD in May 2023 to N763/1USD as of July 11, 2023 and
N780/1USD as of July 20, 2023), stability is expected over the medium term as
efforts to ramp up export proceeds intensify, alongside anticipated decline in
demand of imported refined petroleum products,” Festus Adenikinju, member of
the Monetary Policy Committee (MPC) said.
He said stability of the exchange rate is particularly
important due to its strategic role in anchoring investor confidence and
pass-through to domestic prices.
According to him, ongoing efforts to boost foreign exchange
supply should therefore be strengthened as a more sustainable approach to
stabilizing the foreign exchange market.
“Developments in the foreign exchange market are also
important considerations for policy. The recent foreign exchange market reforms
which have resulted in exchange rate convergence, would increase market
transparency, and attract more foreign capital inflows,” he said.
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