The volume of dollars traded on the Investor & Exporter forex window surged by 46.69%, reaching $123.25 million on Monday, compared to $84.02 million on Friday.
Despite this significant increase, the naira experienced a 1.96% depreciation, closing at N795.41/$ on Monday, as opposed to N780.14/$ on Friday, according to FMDQ OTC Securities Exchange data.
Notably, the naira’s trading range fluctuated between N701/$ and N1099/$ during Monday’s session.
In parallel markets, the naira continued its downward trend, depreciating by 4.55% to N1,150/$ from the N1,100/$ recorded on Friday.
Bureau de Change operators reported buying at N1,110/$ and selling at N1,150/$, while another trader, Kadir, mentioned selling at N1,150/$ and buying at N1,170/$.
The persistent depreciation of the naira follows the Central Bank of Nigeria’s decision to allow the free flow of the country’s exchange rate in June through the official Investor & Exporter forex window.
Before this policy change, the naira traded at 471.67/$ in the official market and 765/$ in the parallel market in June.
Recent insights from the Economist Intelligence Unit project the naira closing at N810/$ on the official market by the end of 2023.
The report indicates that after initially floating the naira in June, the central bank has returned to influencing the exchange rate by restricting foreign exchange sales to banks and dealers adhering to a preferred rate.
The EIU anticipates ongoing pressure on the naira due to unsupportive monetary policies, highlighting challenges such as negative short-term real interest rates.
Despite the currency float, success is deemed unlikely over the 2024-2028 period, with the expectation that the fuel subsidy may end when the Dangote refinery replaces imports, potentially from late 2024 onward.
