The exchange rate between the naira and dollar has depreciated to N390/$1, according to a report by Nairametrics.
Nairametrics reports that the exchange rate between the naira and dollar has depreciated to N390/$1 at the FMDQOTC NAFEX market, an official market where the exchange rate is traded.
The depreciation was first observed on the market survey on Thursday, November 26th when it traded at N390/$1. The rate remained the same today confirming that it is not a one-off. The exchange rate closed at N390.25/$1 on Friday after trading at a high price of N400.37 and a low price of N383/$1. The exchange rate at the NAFEX market has traded between N383 and N385 per dollar respectively.
A recent circular seen by our sister online news outlet; Nairametrics, also suggests the CBN has devalued the exchange rate between the dollar and naira sold to the BDC’s to N390/$1. The circular mandates the BDCs to sell to potential buyers at N392/$1. The volume of sales for each market is $10,000 per BDC.
See excerpt of the circular:
Please be advised that the applicable exchange rate for the disbursement of proceeds of IMTOs, for the period Monday, November 30th to Friday, December 14, 2020, is as follows.
I. IMTSOs to banks – N388/1USD
II. Banks to CBN – N399/1USD
III. CBN to BDCs – N390/1USD
IV. BDCs to end-users Not more than N392/1USD
V. Volumes of sale for each market is USD10,000.00 per BDC
The circular was signed by Dr. O.S. Nnaji, Director of Trade and Exchange at the CBN, and dated November 30th, 2020.
We also understand the CBN intervened in the market today at a spot price of N393.37/$1 while its 150 days forward rates moved to N399.37 in a bid to clear backlogs.
It is estimated that pent-up demand could be between $2 billion and $3.5 billion.
Last August, the CBN devalued the naira after issuing a circular authorizing dealers instructing them to sell forex to end-users at N386/$1.
It was the first time the CBN will be selling forex to BDC traders since it halted the transaction on March 27th as the country faced an imminent lockdown.
Since then, the exchange rate at the black market has gone from N395/$1 on March 27, 2020, to N495/$1 as of November 27, 2020, exactly eight months later.
The exchange rate at the parallel market (black market) fell to N495/$1 on Friday closing the week at the weakest price since 2017.
Wired transfers done outside of the official system closed as high as N503/$1.