The value of the naira once again appreciated slightly to open at N413.74 per dollar on Monday.
This slight rise came after the currency closed at N415.10 on Friday. However, the FMDQ group reports that by the end of the day, the Naira had fallen back to N415.10 (the same rate at which it closed on Friday).
This return to Friday’s closing price temporarily dashes the hopes of an upward trajectory in the value of the Naira, although it represents an overall stability.
The FMDQ group also released the Spot rates and Forward rates from Monday, November 15. According to the group’s site, the Spot rate rose only as high as N404 per dollar, around which the Spot rate has been moving for the past week. The group reported that the Spot Rates fell as low as N453.75 per dollar on Monday.
For the forward rates, the currency traded as low as N453.75 per dollar, which was the same as the Spot rates. It then went on to trade only as high as N445.50 per dollar on Monday.
The FMDQ group also reported that the total turnover of the currency sat at $138.37 million dollars. This refers to the total value of the currency that was traded at the market throughout Monday.
At the parallel market, the Naira took a slight fall to go down N1 from N540 per dollar which it closed at on Friday to trade at N541 per dollar on Monday.
It has however been noted that while the Central Bank of Nigeria retains awareness of these parallel market (or black market) prices, it generally does not reckon with the prices.
The apex bank, as at November 15 2021, maintains stability in the value of the nation’s currency. The CBN reveals that the Naira trades at N411.34 (as at November 15), a figure around which the currency has been hovering for the last month.
As we approach the end of year and the highly anticipated Christmas period, the overall relative stability that the currency now faces is much better than an alternative which may cause the Naira to dip even further. This is also largely due to the actions of the CBN concerning dollar liquidity.
While the stability is a small improvement, the Naira still trades at a relatively high amount and still affects multiple parts of the country’s economy. Any steps which can lead to a high percentage of appreciation are highly encouraged.
Naira Maintains Stability at Official Fx Window
The Naira maintained its streak on Monday, settling to close at N415.07 per dollar. This is the same price at which the Nigerian currency has closed for the last few days, according to the Investors and Exporters window where the Naira is traded officially.
While there have been very marginal differences in the opening prices over the last days, in the end the currency has come around to settle down at the same price (N415.07 per dollar) at the close of each day.
On Friday, the Naira opened at N413.71 per dollar which represented a 0.03% change from the previous day, according to the Investors and Exporters window. On Monday, the currency opened at a similar price, starting the day off at N413.75 per dollar.
Although there have been minimal changes in the opening prices, generally the currency opens at similar prices, with backgrounds of N413 per dollar and changes of only a few kobo.
While the general opening and closing prices didn’t witness much change, the same cannot be said for the Spot and Forward rates. On Friday, the Spot rate was between N404 per dollar and N444 per dollar. However, Monday saw a significant change in the Spot rate. Across all transactions that occurred on Monday, the naira reached a high of only N405 per dollar (N1 lower than Friday’s high), and went on to reach a low of N456.97 per dollar (N12 lower than the previous day).
The Forward rate – for future transactions that were agreed upon on Monday – saw a more significant change. Friday’s Forward rate high was recorded at N411 per dollar, but on Monday that fell greatly to N452 per dollar. However, Monday’s Forward rate lowest was N453 per dollar, about N2 better than the N455 per dollar at which it traded on Friday.
The total turnover of the dollar recorded on Monday sat at $256.69 million. This was considerably higher than the turnover of $215 million that was recorded on Friday.
At the parallel market on Monday, the Naira fell to close at N569 per dollar from the N560 per dollar at which it traded the previous day. After that exponential rise to about N535 per dollar, the parallel market is seeing the Naira return even closer to the N575 per dollar price at which it had sat for a while.
Naira Stays Flat at Official Market
After closing at N415.07 per dollar on Thursday, the Naira maintained a flat rate and went on to close at the exact same price on Friday. This is according to the data released by the FMDQ group, on the group’s official website.
This connotes a certain stability around the currency, as the recent rates at which the currency has been closing at in recent days and weeks have hovered around this particular price range. It further strengthens the idea that the festive period will see the Nigerian currency trade at that range.
The FMDQ group as usual also updated the Forward rate and the Spot trade of the Naira’s trades on Friday. The prices appeared to have returned to some of the usual, standard rates which they consistently traded for a while.
The Spot rate returned to its usual price range, falling as low as N444 per dollar and rising up to N404 per dollar. What this means is that throughout the entire day, the Naira traded at different prices at different times, trading between N404 per dollar and N444 per dollar.
For the Forward rate, a high of N411 per dollar was reached while a low of N455.97 per dollar was gotten. The Forward rate, which is used for future transactions generally trades at lower prices than the Spot rate.
On Friday, the total turnover of the dollar sat at $215.47 million. Turnover refers to the amount of the currency that is involved in the trade throughout the entire day. Everything that was traded on Friday amounts to 215 million dollars. This was a huge increase from the turnover of the previous day, which sat at $98 million.
It has been reported that in a bid to save the naira, the Central Bank of Nigeria threw a little over $2 billion into the Investors & Exporters window in the seven months to July this year (2021). In the corresponding period last year, the apex bank only injected $628 million into the window.
Naira Faces Temporary Stability at the Official Window
After closing at N415.07 on Wednesday, the currency temporarily rose to open at N413.58 per dollar on Thursday, before returning to close at N415.07 per dollar by the end of the day. This is according to the data obtained from the Investors and Exporters window.
The last few days have seen the emergence of marginal changes in the value of the Naira against the dollar, with the changes not being more than N1 or N2 at a time. The constant flux of the Naira at a marginal rate seems to suggest that the currency will remain at this level over the upcoming festive period.
This could however be changed, but only by drastic action on the part of the Central Bank of Nigeria.
The FMDQ website shows the Spot rate and Forward rate of the Naira, with the Spot rate representing the range of prices at which the Naira traded throughout an entire day. For Thursday, the Naira traded between N406 per dollar and N452 per dollar.
This means that all the dollar transactions that took place across Thursday took place with the Naira trading at a high of N406 per dollar and at a low of N452 per dollar. However, at the end of the day the Naira had settled down at N415.07 per dollar.
The Forward rate refers to the value of the Naira against the dollar which applies to transactions which have been agreed to take place in the future, and not immediately. Thursday’s forward rate was particularly low, with its highest coming at N452.61 per dollar, and the lowest falling in at N453.75 per dollar.
This could particularly discourage individuals or groups who would have been seeking to agree on some future deals on Thursday, with the low prices not spelling positivity for trade.
The turnover of the dollar recorded on Thursday sat ta $98.07 million, meaning that the entirety of the dollar traded across all the rates amounted to a little less than $100 million.
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