Again, Naira weakens against dollar at I&E forex window

Naira depreciated against the U.S dollar on Monday at the Investors & Exporters (I&E) window of the foreign exchange market, according to data extracted from the FMDQ Security Exchange where currencies are officially traded.

Naira closed at N394.50 at the Monday trading session. This shows that the currency (Naira) weakened by N1.2 or 0.30 per cent from N394.17, the rate at which it closed at the previous session on Friday last week.

The depreciation happened as turnover contracted by 10.2 per cent, with $39.99 million recorded as against the $44.51 million posted on Friday.

The local unit during the trading session saw an intraday high of N390.00 and a low of N395.00 before closing at N394.50.

Meanwhile, data from abokiFX.com, a website that collates parallel market rates in Lagos, showed naira closed at N477, the same rate it closed during the previous session Friday last week.

This yields a spread of N82.5 between the unofficial market and the I&E window exchange rates, which translates to a gap of 20.9 per cent.

While the widening of the spread between the rates at which naira is traded at both markets subsist, it has been attributed to the significant decline in dollar inflow from crude, which contributes more than 90 per cent of Nigeria’s foreign exchange earnings, due to a fall in oil price in April last year, and the devastating effects of the COVID-19 upsurge ravaging the world.

In the bid to remedy this, the Central Bank of Nigeria had in December, directed International Money Transfer Operators (IMTOs) and commercial banks in the country to pay beneficiaries of diaspora remittances only in dollar, so as to deepen liquidity in the foreign exchange market and create transparency in the administration of diaspora remittances into Nigeria.

The apex bank in a memo last week Friday, vowed to sanction IMTOs that are still, despite its directive, paying remittances in the local currency.

The CBN’s official rate on Monday was still N379 per dollar.