- Experts Predict Further Gain as Naira Hits 445/Dollar
The naira rose to 445 against the United States dollar at the parallel market on Sunday, one week after the Central Bank of Nigeria introduced a new policy measure aimed at boosting foreign exchange supply in the market.
The local currency, which had tumbled to 520/dollar last Monday, closed at 450 on Friday.
The CBN had last Monday commenced the implementation of the reformed forex policy with a promise to sell $1m weekly to each of the 21 commercial banks in the country.
Following the announcement of the new forex policy measure by the CBN on Monday, the naira commenced a gradual reversal of its previous losses, closing at 512/dollar on Tuesday.
It recorded further gain on Wednesday and Thursday, closing at 505/dollar and 495/dollar, respectively.
Foreign exchange traders said the CBN had intervened on the official market in recent days.
Economic and financial experts told our correspondent on Sunday that the naira would record further gain this week but not as big as last week’s.
“There is always a restriction point beyond which the exchange cannot cross except there is a huge forex inflow to breach that ceiling,” a currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said.
“The naira will gain further but it won’t be like last week’s own.”
The Managing Director, Financial Derivatives Company Limited, Mr. Bismarck Rewane, commended the CBN for the policy reform and wondered why the regulator had delayed such measure for months.
Rewane said, “With less than $600m supply into the spot market, the naira has gained 13 per cent of its value to N460/$ on Friday. Can you imagine what would have happened if the spot market was adequately funded in a transparent manner for nine months ago, rather than the opaque forward transactions.
“Maybe we could have had a soft landing rather than a race to the bottom. This move by the CBN is a good one in the right direction provided the dollar supply is sustained.
“We expect the CBN to commit itself to a regular and predictable supply of dollars to the forex spot market in March. There will be a rapid convergence of rates and a gradual end to multiple exchange rates and forex abuse.”
The Managing Director of Cowry Asset Management Limited, Mr. Johnson Chukwu, also believe the naira will rise further this week.
Chukwu said, “Confidence is beginning to return to the market. The naira will gain further but there may be resistance around N400/dollar because the CBN sells to BDCs currency at 381/dollar.
“The CBN needs to watch and sustain this intervention for weeks. They need to work with the fiscal authority to get the $2.3bn loan from World Bank and China released on time.”
Chukwu, Ezun and other experts advised the CBN to re-admit the banned 41 items into its official forex window.
According to them, there is the need to discourage end-users from going to the parallel market to source for forex.
Exchange Rate: Dollar to Naira Today, Friday 3 December 2021
The Nigerian Naira remained under pressure across the board despite efforts by the Central Bank of Nigeria (CBN) to prop up the value of the local currency against its global counterparts.
Backed by Nigeria’s foreign reserves, Naira plunged from N306 against the United States Dollar to N414 at the official forex window during the peak of COVID-19 when crude oil dropped to $15 a barrel and eroded Nigeria’s foreign exchange earnings.
Since then, Africa’s largest economy has instituted various forex policies to support the Naira, deepen economic productivity and generally grow activity across key sectors. However, the lack of a stable foreign exchange market has impeded capital importation needed to prop up Naira value as foreign investors continue to stay off the Nigerian market according to the World Bank.
Naira to Dollar Exchange Rate Official Fx Window (FMDQ)
On Thursday, December 2, 2021, the Nigerian Naira opened at N413.94 against the United States Dollar at the Official Forex Window managed by the FMDQ Group.
The local currency sheds 0.06 percent to a greenback by the close of business on Thursday, closing at N414.80 to a United States Dollar.
Analysing the forex spot market, Naira rose to as high as N404 against the American Dollar during the trading house of Thursday before plunging to N444. Trading activity dropped on Thursday as investors traded $139.69 million US dollars, in contrast to $223.8 million transacted on Wednesday.
Naira Black Market Exchange Rates
At the unregulated forex market, the Naira exchanged hoarders and speculators are exchanging the Naira at N558 to United States Dollar.
This was in spite of the CBN efforts at shutting down activity at that section of the forex market given its damages to the nation’s forex market and the fact that Nigerians were almost adopting the black market rate as the official rate.
Experts, including the Vice President, Yemi Osinbajo have blamed the Central Bank of Nigeria for existing of the black market. According to the Vice President, as long as the forex arbitrage exists due to the numerous forex rates, speculators, hoarders and other forex traders will continue to sustain the unregulated black market.
Central Bank of Nigeria’s Official Naira Rates
The CBN quoted rates are the rates the apex bank sells various currencies to Deposit Money Banks (DMBs) in Nigeria. The DMBs are however expected to add between N1 to N2 on each rate to cover costs when selling to customers.
|12/1/2021||SOUTH AFRICAN RAND||25.936||25.9993||26.0626|
Nigerian Naira (NGX) to Bitcoin (BTC)
Bitcoin, the world’s most dominant cryptocurrency, lost 0.13 percent against the Naira to N23.299 million or $56,833 in the last 24 hours.
Against Ethereum (ether), the second most capitalised cryptocurrency, the Naira gained 0.15 percent to N1.874 million.
GTBank Naira Exchange Rates
As of December 2, 2021, GTBank exchanged the Naira to the US Dollar at N480. While the Euro, the Canadian Dollar and the Great Britain Pound were traded at N549, N366 and N649, respectively since August 20, 2021. See other Naira exchange rates below.
Access Bank Naira Exchange Rates
Sterling Bank Naira Exchange Rates
Union Bank Naira Exchange Rates
UBA Naira Exchange Rates
Naira Sees Stability at Official Window
The Naira has this week witnessed a steady, unchanged value against the naira as it closed at N415.07 against the dollar on Wednesday (for the fourth straight day), according to the Investors and Exporters window where the Nigerian currency is traded officially.
As mentioned in a previous article, the Naira appears to have found a resting place for its value heading into the festive period. Even though the Naira is now stable, the value may still be too negative for the Nigerian economy, as food prices and prices for other goods keep going on the rise.
The FMDQ group through its website gives updates concerning the currency’s daily trading (opening and closing prices). It also gives updates on the Spot rate and Forward rate; the prices at which the currency trades for transactions throughout that day as well as future transactions which were agreed on that day.
The Spot rate maintained its usual highest value of N404 per dollar, but its lowest value fell as far as N457.02 per dollar. This is considerably lower than the N444 per dollar which it usually attains.
The Forward rate has however seen changes in value, dropping to a high of only N445.97 per dollar, maintaining its lowest price of N457 per dollar.
The FMDQ group also reports the total turnover of the currency in a day, i.e. the total amount of the currency that was traded throughout that day. On Wednesday, it was revealed that the total amount of the dollar that was traded sat at $223.8 million at the close of the day. This is higher than the $152 million which was recorded the previous day.
At the parallel market (which is not recognized by the Central Bank of Nigeria), the Naira was sold at a price of N558 per dollar as it looks to maintain the recovery which it made after hitting an all time low of N575 per dollar in September.
Naira Stabilizes at N415/$1 at Official Fx Window
The Nigerian currency has continued its trend of closing at N415 per dollar, after it settled to close at that price (which it has closed at consistently since Friday) on Tuesday. This is according to data gathered from the Investors and Exporters window where the Naira is traded officially.
It seems to appear that the Naira has found its resting place at this price, considering the number of days at which it has closed at that particular price. It is now left to see how this currency will trade closer to the festive period.
However, this ‘stability’ cannot be held as a permanent thing, because for this price to be the new normal, it may have to be maintained over a longer period of time. The Central Bank of Nigeria should be making moves to bring the value of the naira back up again, to make things better for Nigerians and Nigeria especially as we approach the Christmas period.
The FMDQ group’s updates of the Spot and Forward exchange rates showed slight changes here and there, with nothing too heavy. The Spot rate did not see any changes from Monday, as it maintained the high of N405 per dollar and a low of N465.97 per dollar.
The Forward rate however witnessed a jump, with Tuesday’s high jumping back to N411 per dollar from N452 per dollar where it sat on Monday. The lowest of the Forward rate further fell to N457 per dollar from the N453 per dollar where it was on Monday.
Those who would benefit the most from Tuesday’s trading round are those who agreed on future deals at prices between N411 and N415 per dollar.
The daily turnover recorded by the FMDQ group on Tuesday sat at $152.98 million, more than $100 million less than the $256 million which Monday recorded.
On Tuesday, the parallel market saw the Naira trade at N565 per dollar. The Central Bank has however stated that it does not reckon with the parallel market.
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