The Naira depreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, October 7 to N1,635.15/$1.

Analysis done by Investors King showed that the local currency lost 0.24 percent or N3.94 at the specialised window, according to data obtained from the FMDQ Securities Exchange.

This is compared to N1,631.21/$1 published in the preceding session on Friday.

This coincided with a drop in the turnover on Monday as secondary data showed an aggregate of $126.24 million on record, compared to the $239.36 million turnover reported on Friday.

This represents a drop of $113.12 million or 47.3 percent.

Last week, the Central Bank of Nigeria (CBN) announced that it sold $543.5 million to authorised dealers and deposit money banks (DMBs) to reduce observed market volatility caused by demand from importers and seasoned demand for FX between September 6 and 30, 2024.

According to a statement issued by Omolara Duke, the Director of Financial Markets Department of the CBN, the transaction was through a two-way quote at the Nigeria Foreign Exchange Market (NFEM) on 11 dealing days.

In a different pattern, the local currency closed flat against the Pound Sterling and appreciated on the Euro at the week’s opening session.

Trading against the British pound, the local currency closed at N2,175.44/£1 while it closed at the rate of N1,788.96 per Euro, a gain of N41.15 from N1,830.11.

The Naira also dropped against the US Dollar at the unofficial black market as it closed at N1,681.67 from N1,676.56 quoted on Friday. This signified a N5.11.

It followed the same pattern against the Pound Sterling and the Euro trading at N2,156.23/£1 and N1,852.75/€1 respectively, losing N2.40 and 60 Kobo from N2,153.83/£1 and N1,852.15/€1.

The local currency also declined by N5.37 on the Canadian Dollar as it fell to N1,207.55/CAD1 from N1,202.18/CAD1

Bureau De Change (BDC) operators in Nigeria have said that the value of Naira has continued to depreciate in the parallel market because of the scarcity of forex in the sector as major sources become drastically reduced.

This was disclosed by the Chairman of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe.

Gwadabe said sources of forex to that segment of the forex market have been severely impacted by the recent policies of the Central Bank of Nigeria.

He averred that members of the Association no longer get as much forex from relevant sources such as exports and external remittances and now rely on irregular intervention from the apex bank.

Blaming the International Money Transfer Operators (IMTOs), Gwadabe said the liberalisation of the market has prevented supply inflow which is being reduced and has made it difficult for BDCs.

According to him, IMT0s have ambushed the international remittance payment as most remittance payment now go their direction.

He added that non-oil exports, which is another source of FX for BDCs have also been reduced and the CBN intervention is not regular.

In the past, he noted that BDCs used to do up to $40k weekly but now, it is not more than $20k.

Gwadabe declared that the Naira will continue to depreciate in the parallel market except there is regular intervention by the CBN.

Describing the BDCs as the language of the invisible players in the retail end of the market, he stated that any sentiment of scarcity by buyers as well as sellers would affect the value of the Naira.

Recall that the Naira fell to N1,700/$ in the parallel market in September, its lowest in seven months but recovered marginally on the 2nd of October. However, the official market section saw a wide depreciation of up to 8%.

The CBN in the past one year has sought to regulate the IMTOs and enable them to play a more prominent role in attracting foreign exchange into official channels from international sources.

In 2023, Nigeria received around $19.5 billion- around 35% of total remittances to Africa according to the World Bank.

However, Taiwo Oyedele, the Chairman of the Presidential Committee on fiscal policy and tax reforms stated that only about 10% of the nearly $20 billion remittance entered the official forex exchange market as the parallel market swallowed up almost 90% of remittance inflows.

The Naira continued to strong-arm the US Dollar as it made a 1.7 percent gain in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, October 4 as the local currency gained a value of N28.05 to close the closing session at N1,631.21/$1 at the official window.

According to data obtained from the FMDQ Securities Exchange, compared to N1,659.26/$1 published in the preceding session on Thursday.

Turnover published on the FMDQ Group website stood at $239.36 million indicating that the session’s turnover slid by 46.9 percent, indicating that there was a decrease of $211.03 million compared to $450.39 million published the previous day.

Equally, the domestic currency also witnessed gains against the British currency and the Euro in the week’s final session.

On the Pound Sterling, the local currency made an appreciation of N24.21 to wrap the session at N2,175.44/£1 from N2,199.65/£1 that it sold at the previous session.

Also, against the Euro, the Nigerian currency closed at N1,830.11/€1 versus N1,830.89/€1, indicating a 78 Kobo appreciation.

In the black market, the Naira also gained on the American currency by N5.23 to close at N1,676.56 per Dollar from N1,681.79.

It also made the same movement against the British Pound as it rose by N17.10 to N2,153.83 against N2,170.93 and trading against the Euro, the local currency added N6.93 to N1,852.10 versus N1,859.03.

It equally recorded a positive end result against the Canadian Dollar as it gained N10.52 to end the last session at N1,202.18 from Wednesday’s N1,212.72.