The Nigerian Naira improved slightly against the United States Dollar at the Investors and Exporters’ foreign exchange window published by the FMDQ Group on Wednesday.
The Naira gained 0.31 percent or N1.05 to finish the day at N384.80 to a United States Dollar, higher than the N385.85 it opened the day.
Investors at the window traded a total of $58.85 million during the trading hours of Wednesday.
Despite the persistent liquidity issue, the I & E FX window seems to be managing the situation better, likely due to the Central Bank of Nigeria’s intermittent intervention, against the parallel market/black market where scarcity abound.
At the black market, the Naira depreciated by N3 from N475 it was sold on Tuesday to N478 on Wednesday.
This decline continues against the Euro as the Naira declined by N4 to N557, down from N553 it exchanged on Monday.
Economic uncertainty amid rising inflation rate and unclear economic policy path continues to dictate Nigeria’s exchange rate since the COVID-19 broke out in Africa’s largest economy.
In an effort to curb economic degradation and plug decline, the central bank devalued the Naira twice and introduced discounts on crude oil to deepen sales and prop up foreign reserves. However, global pandemic amid the United States presidential election worsen commodity outlook and subsequently weigh on Nigeria’s foreign revenue generation and dollar supply by the apex bank.
The International Monetary Fund has said Africa’s largest economy needs to up revenue generation to augment its monetary policy and support its fiscal policy if it must continue to service its rising debt and simultaneously embark on capital projects necessary for development.
The Fund listed tax collection efficiency, removal of fuel subsidy, the introduction of cost-reflective electricity tariff and unification of the nation’s foreign exchange rates as some of the key steps to address the ongoing crisis.
Nigerians have protested against each of the measures, saying it was wrong and blatantly anti-people policy given the negative effect of COVID-19, high unemployment, security issues, poor wages, and high inflation rate on the Nigerian people.