The Association of Bureau De Change Operators (ABCON) has appealed to the Central Bank of Nigeria (CBN), to make BDCs payout agents for diaspora remittances.
According to information from Abokifx – a prominent FX tracking website, at the black?market where forex is traded unofficially,?the Naira remained stable against the Dollar to close at N470/$1 on Thursday – the same rate that it exchanged for on Wednesday, December 30.
– The local currency had strengthened by about 7.8% within one week in September at the black market, as the CBN introduced some measures targeted at exporters and importers.
– This is to boost the supply of dollars in the foreign exchange market and reduce the high demand for forex by traders.
– However, the gains appear to have been completely erased with the recent crash of the exchange rate.
– The CBN has sold over $1 billion to BDCs since they resumed forex sales on Monday, September 7, 2020.
– This was expected to inject more liquidity into the retail end of the foreign exchange market and discourage hoarding and speculation.
– However, the exchange rate against the dollar has remained volatile after the initial gains made, following the CBN’s resumption of sales of dollars to the BDCs.
– Despite the CBN’s intervention, the huge demand backlog by manufacturers and foreign investors still puts pressure and creates a volatile situation in the foreign exchange market.
– The Naira depreciated against the?dollar at the Investors and?Exporters (I&E) window on Thursday, closing?at N410.25/$1.
– This represents a N16.25 drop when compared to the N394/$1 that it exchanged for on Wednesday, December 30.
– The opening indicative rate was N392.88 to a dollar on Thursday. This represents a 7 kobo gain when compared to the N392.95 that was recorded on Wednesday.
– The N412.05 to a dollar was the highest rate during intra-day trading before, it still closed at N410.25 to a dollar. It also sold for as low as N385/$1 during intra-day trading.
Forex turnover: Forex turnover at the Investor and Exporters (I&E) window increased by 43% ?on Thursday,?December 31, 2020.
– According to the data tracked by Nairametrics from FMDQ,?forex turnover rose from $164.81?million?on Wednesday, December 30, 2020, to?$235.75?million?on Thursday,?December 31,?2020.
– The CBN is still struggling to clear the backlog of foreign exchange demand, especially by foreign investors wishing to repatriate their funds.
– The increase in dollar supply after last week’s drop reinforces the volatility of the foreign exchange market. The supply of dollars has been on a decline for months due to low oil prices and the absence of foreign capital inflow into the country.
– The average daily forex sale for last week was about $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
– Total forex trading at the NAFEX window in the month of September was about $1.98 billion, compared to $843.97 million in August.
– The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand, and a shaky economy that has been hit by the coronavirus pandemic.