The foreign exchange, turnover on Wednesday rose by 56.67 percent to $52.50 million from $33.51 million recorded on Tuesday at the Investors and Exporters (I&E) forex window.
This led to an improvement in liquidity as FX dealers show strong participation in the market. However, the level of liquidity could not strengthen the local currency as naira depreciated by 0.17 percent to N394.50k per dollar at the closed of trading from N393.83k on Tuesday, data from FMDQ indicated.
Most foreign exchange dealers at the I&E window maintained bids between N387.10 and N411.00 per dollar.
The foreign exchange market closed with naira unchanged at N470 against the dollar at both the Bureaux De Change (BDC) segment and the parallel market since December 29, 2020.
In the third quarter (Q3) 2020, the Central Bank of Nigeria (CBN) sustained interventions in the foreign exchange market and resumed foreign exchange cash sales to the BDC operators, to boost liquidity and ease demand pressure.
The exchange rate of the naira vis-à-vis the dollar was further adjusted during the Q3 period from N361 /US$ to N381/US$. The CBN also introduced measures to curb abuses and ensure prudent use of the foreign exchange.
Read also: With an eye on growth, Nigeria’s Access Bank acquires Zambian Cavmont Bank
Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON) the CBN should continue to expand the supply source of the buffers through deliberate and strategic plans in the Diaspora remittances.
He said emphasis should also be given to diversification to enjoy the full potential of the present Africa Continental Free Trade agreements.
“It should also partner relevant stakeholders on the adoption of newer technologies and digitization of our Bureaux de Change sector for the growth of the economy,” he said.
This, he said should enhance the intelligence base approach for effective monitoring and supervision of the market.
The Apex bank through its periodic interventions in the foreign exchange market continued to boost the supply side of the market, as the COVID-19 crisis weakened the private sector supply chain segment of the market.
During the third quarter of 2020, total foreign exchange sales to authorized dealers by the Bank amounted to US$4.37 billion, a decline of 2.3 percent from the level in the preceding quarter. This was attributed largely to the decrease in wholesale forward intervention and interbank sales. The total foreign exchange sales represented a decrease of 56.4 percent, compared with the corresponding quarter of 2019.
