Nigeria’s currency, the naira, Thursday weakened at the parallel market, shedding 0.55 percent to N365 to the dollar from N363 it traded Wednesday. This is just as traders complained of uncertainty and frequent government policies, which, according to them, have continued to hammer the currency exchange rate at the street market.
The Nigerian currency also lost N2 each against the Pound Sterling and the Euro to exchange at N475 from N473 and N424 from N422 posted on Wednesday, respectively
The multiple exchange rate windows at the foreign exchange market have been a source of concern to traders, investors and multilateral institutions like the IMF and others.
In a related development, the FMDQ OTC, an official market for trading debt securities, forex and other financial products in Nigeria, Wednesday asked banks to start quoting rates from the Investors’ & Exporters’ FX Window instead of the CBN official rate as it is more market determined.
The I&E FX Window was introduced by the Central Bank of Nigeria (CBN) in April to boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions.
Since then, the CBN bank has been injecting foreign exchange in the market to ensure a convergence between the interbank and Bureau de Change (BDC) rates.
Isaac Okorafor, CBN acting director, corporate communications, says the bank’s intervention was in line with its commitment to sustain liquidity in the market to meet genuine requests as well as deepen flexibility in the foreign exchange market.