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The Nigerian naira depreciated further to N770.17 per United States (US) dollar at the Investors, Exporters’ (I&E) Foreign Exchange (FX) window on Friday as traders continue to search for a market clearing rate.
Following the apex bank fx reform, the market is expected to remain volatile in the near term. A number of currency traders believe calm will return as the apex bank release plan to resolve fx backlog issues.
The trading pattern this week showed the supply side posited on a weak fence, causing the demand level to push the rate curve upward.
Though it lost big against the US dollar, the naira juggled well against other major foreign currencies tracked by MarketForces Africa.
Based on FMDQ Exchange quotes, the exchange rate at the Investors and Exporters (I&E) windows recorded sideways movement, which depends on prevailing foreign currency demand and the market’s supply level.
At the official and parallel markets, rates closed with a marginal spread of N0.17. The official rates depreciated to N770.17 from 765.13, likewise, the black-market rate declined 0.59% to N770.
MarketForces Africa’s channel check discovered that the maximum rate quoted in the parallel market this week was N780 per greenback. This comes in stark contrast to fake N810 news on Twitter. In the forward market, the 1-month, 3-month, and 1-year forward rates closed lower at N764.42, N784.68, and 878.74, respectively, indicating losses.
Naira was not sold at N810, currency traders in the parallel market who spoke with MarketForces Africa said in a phone call. Our reporters gathered that speculators are fueling negative narratives via social media to ensure they maintain their position.
“If you see some news on social media, you just have to be careful what you assimilate. Media houses are also picking trending news about naira on Twitter without subjecting the same to verification…”, an investment banker told MarketForces Africa, saying there is near convergence between official and parallel market rates.
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