The Nigerian currency, Naira, on Wednesday dropped at the official foreign exchange market from 305.10 per dollar to close yesterday trading at 305.55, while remained unchanged at the parallel segment of the forex market.
The local currency, at the interbank forex market, had on Tuesday gained 0.16 per cent to close at 305.10 to the dollar but relapsed by 0.15 per cent the following day to close at 305.55. But at the parallel market, the Naira was seen steadied at 363 to the dollar and also maintained the depreciated rate of 425 per Euro against 422 traded earlier in the week and 475 to the Pound sterling compared to 478 it was sold on Monday.
The local currency, however, at the Nigeria Autonomous Foreign Exchange (NAFEX) window, opened at a depreciated rate of 360.20 lower than 359.79 opened on Tuesday and Monday rate of 359.85 per dollar. It also, closed at 360.71 weaker than 360.31 and 360.50 sold on Monday and Tuesday, respectively.
Although, the NAFEX widow as at close of yesterday trading activities rebounded with a significant increase with the daily turnover figure of $240.54 million against $86.69 million on Tuesday and $207.20 million declared on Monday and also weaker than $207.26 exchanged last Friday.
Meanwhile, as part of its continued effort in stabilizing and ensuring liquidity in the official foreign exchange market, the Central Bank of Nigeria (CBN) has sold not less than $3.47 billion in the third quarter of 2017.
In the last three months, between July and September, the apex bank sold $727.5 million to foreign exchange dealers in July and its grew to $1.5 billion in August, representing an increase of 106 per cent, while compared to July sales.
In the same month, the total sum of $561 million was allocated to the clearance of the backlog of matured foreign exchange obligations for raw materials and machineries for manufacturing companies, agricultural chemicals, and airlines – was for Retail Secondary Market Intervention Sales (SMIS).
But in the following month, August, the sum of $500 million went to wholesale foreign exchange dealers, while $235 million to Small and Medium Enterprise (SMEs) and $200 million to invisible demands.
In the just concluded month, September, the central bank lifted the local currency with a total injection of $1.24 billion, as $485 million went to the Retail Secondary Market and $300 million to SMEs. Others are $255 million and $200 million, invisibles, and wholesale segments, respectively.
Although, activities in the Investors & Exporters Foreign Exchange (I&E FX) window improved in September, with total turnover increasing by 14.61 per cent to $4.22 billion in September, from $3.68 billion in August. However, analyst had said, I&E FX window attracted a lot of foreign exchange from the offshore investors that purchased government bonds and Treasury-bills in September.
The CBN’s foreign exchange sales were intended to cover for personal and business travels, medical needs, and school fees, futures market and other approved transactions. At the time CBN began massive funding of the foreign exchange market, the naira had lost significant value, trading at over N500/$1 at the parallel market. Between July and September, the Naira against the Dollar has been hovering around $1/N360- N370.