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Naira Gains Across Board as CBN Moves to Flood Market

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Naira Dollar Exchange Rate - Investors King

Naira Gained N15 Against US Dollar Ahead of Dollar Sale

The Nigerian Naira gained N15 against the United States dollar following the Central Bank of Nigeria’s announcement that it would commence the sale of forex to the Bureau de Change Operators across the country on September 7.

The local currency had plunged to as low as N480 against the US dollar in recent weeks due to the persistent dollar scarcity. However, the CBN decision to resume the sales of forex to the BDCs bolstered the value of the Naira on the black market as speculators and hoarders were forced to bring out their US dollars.

The Naira appreciated by N15 from N480 it traded against the US dollar two weeks ago to N465 on the black market on Monday.

Against Great Britain Pounds it gained N10 to N605. While it gained N10 against the European common currency to N545, up from N555 it exchanged last week.

Investors King’s Note: The central bank planned to sell $10,000 per week to each of the 3,000 registered bureaus de change operators. Meaning, the apex bank planned to flood the market with $30 million per week and $120 million per month.

This, we expect to temporarily ease dollar scarcity but we doubt the apex bank would be able to sustain this intervention given the weak foreign reserves and low oil price.

Therefore, the economic outlook remained uncertain, especially with Africa’s largest economy expected to plunge into recession in the third quarter and unemployment rising to as high as 27.1 percent with inflation at 12.82 percent.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Naira

Naira Closed at N411.25 to US Dollar at NAFEX Window

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Naira Dollar Exchange Rate - Investors King

The Nigerian Naira declined further against the U.S Dollar on Tuesday ahead of the Ramadan holiday to trade at N411.25 to a single U.S Dollar at the Nigerian Autonomous Foreign Exchange (NAFEX) window.

The local currency plunged as low as N420.23 per dollar during the trading hours of Tuesday despite opening the day at N410.33/US$ before settling at N411.25 to a US dollar.

Investors on the window exchanged $98.33 million on Tuesday.

At the parallel section of the foreign exchange, Naira traded at N483 to a United States Dollar; N673 to a British Pound and N580 to a Euro.

Foreign exchange rates remained largely unchanged at the bureau de change section, with the Naira trading at N482 to a U.S Dollar; N674 to a British Pound and N584 to a Euro.

Several factors continue to weigh on the Nigerian Naira, especially with the foreign reserves hovering around record low and crude oil output not at an optimal level.

Other factors like rising inflation rate and drop in economic activity due to COVID-19 effect on the economy and lack of enough fiscal buffer to cushion the economy.

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Naira

Daily Naira Exchange Rates; Thursday, May 6, 2021

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Naira Exchange Rates - Investors King

Naira depreciated further at the parallel market on Thursday as the local currency traded at N485 to a United States Dollar. The Nigerian Naira exchanged at N676 to a British Pound and N585 to a Euro as shown below.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
06/05/2021 480/485 665/676 575/585 62/69 395/405 292/320

Bureau De Change Naira Rates

Date

USD

GBP

EURO

NGN

BUY/SELL

BUY/SELL

BUY/SELL

06/05/2021

475/482

663/676

575/587

06/05/2021

475/482

663/676

575/587

Central Bank of Nigeria’s Official Naira Rates

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Forex

CBN Extends N5/$ Incentive Period to Boost Dollar Inflow

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Godwin Emefiele - Investors King

The Central Bank of Nigeria (CBN) has extended the N5 per US Dollar incentive on forex remittance indefinitely to boost liquidity and further deepen economic recovery.

The initiative was scheduled to end on May 8. It was introduced to encourage recipients of dollars to use formal banking channels and help the central bank capture such inflows to boost the stability of the local currency, which has been under pressure after oil prices plunged last year.

“We hereby announce the continuation of the scheme until further notice,” the regulator said in a statement on its website on Thursday.

The naira has been devalued three times since last year after a sharp drop in oil earnings, which accounts for 90% of foreign-exchange inflows, and remittances from workers abroad led to a dollar crunch in the West African nation, which produces the most crude in Africa. The local unit traded for 410.31 on the investors and exporters window, also called Nafex, as of 8:51 a.m. in Lagos.

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