The naira continued to witness a downward trend as it recorded a record low against the dollar, the British pound sterling and euro on Thursday amid the lingering scarcity of foreign exchange in Nigeria.
The value of the naira plunged sharply against the US currency at both the parallel market and the Investors’ and Exporters’ foreign exchange window.
The local currency, which stood at 526/$1 on Tuesday, fell to 530/$1 at the parallel market on Thursday from 528/$1 on Wednesday. There's no clue from the CBN regarding how it hopes to reverse the trend.
The naira also weakened to 720 against the pound at the parallel market from 717/£1 on Wednesday, while the euro rose to N620 from N616 on Wednesday.
Also at the I&E window, the naira dipped to 411.67/$1 on Thursday from 411.50/$1 on Wednesday, according to FMDQ Group.
Between 55 per cent to 60 per cent of Nigerian forex transactions are traded at this window, which is used by the CBN and most exporters and investors, according to Financial Derivatives Company Limited.
“It serves as not only a source of price discovery but also a barometer for measuring potential and actual CBN intervention in the market. Some of the exchange rate determinants are balance of payments, capital inflows and trade balance,” the FDC said.©Standard Gazette, 2021. Unauthorized use and/or duplication of this material without express and written permission from this site’s publisher is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Standard Gazette with appropriate and specific direction to the original content.