The exchange rate between the dollar and naira fell to N803/$1 at the investor & exporter window on Friday, July 15, 2023.
This is the lowest ever the exchange rate has fallen to since Nigeria adopted the managed float exchange rate system and the first time the rate has closed above N800/$1.
The closing rate of N803/$1 represents a 7.3% decline from the start of the week when it closed at N744/$1. The first signal of a challenge was when the exchange rate closed at N776/$1.
I&E Window falling: Data from the FMDQ where the exchange rate trades unofficially reveal the exchange rate depreciated by 7.72% falling from the N746.28 closing rates of Thursday, July 13, 2023.
Parallel market: Checks at the parallel market also show a similar plummetting of the exchange rate as it fell to N815/$1 per Nairametrics research.
Meanwhile, Nigeria’s forex reserves closed at $34 billion as of July 11th 2023.
BDC operators still shut out: BDC operators who spoke to Nairametrics early in the week suggested that the continuous policy of shutting them out is not helping the forex market as they continue to be a major play.
Optics: Nairametrics opines that some of the challenges of the exchange rate could be due to the lower supply of forex in the market despite demand pressures still remaining.
Analysts at Nairametrics Club House show “FollowTheMoney” also opine the economy is still not fully optimized for the exchange rate to achieve the stability we seek.
Nairametrics Chief Analyst, Ugodre Obi-Chukwu, also addressed the matter on Arise TV, opining that Nigeria is still facing a money supply of about N55 trillion, which is fuelling demand for exchange rates.
CBN Mum: Despite the market volatility, the central bank is yet to make any comment explaining how the issue is to be addressed.
Culled from Nairametrics.
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