Naira Depreciates Despite Surge in Dollar Turnover on I&E Forex Window

The Investor & Exporter (I&E) forex window recorded a surge in dollar turnover by 46.69% to $123.25 million on Monday from $84.02 million reported on Friday.

Despite this surge, the naira experienced a 1.96% depreciation to N795.41/$ on Monday from N780.14/$ it traded in the previous trading day, according to data from FMDQ OTC Securities Exchange.

During Monday’s trading session, the naira reached a high of N1,099/$ and a low of N701/$.

Meanwhile, on the parallel market, the naira continued its downward trend, depreciating by 4.55% to N1,150/$ from the N1,100/$ it traded for on Friday.

Commenting on the situation, a Bureau de Change Operator, identified as Awolu, said, “I am buying at N1,110/$ but selling at N1,150/$.”

Another trader, Kadir, added, “It is N1,150/$ today if you want to sell. If you want to buy, it is N1,170/$.”

Despite the increased dollar turnover, the naira’s depreciation is a continuation of the trend initiated by the Central Bank of Nigeria’s decision to allow the free flow of the country’s exchange rate in June on the official I&E forex window.

According to the Economist Intelligence Unit (EIU), the naira is projected to close 2023 at N810/$ on the official market.

The EIU cited unsupportive monetary policies, including limited access to foreign exchange sales for banks and dealers deviating from the preferred rate, as factors contributing to ongoing pressure on the naira.