On Wednesday, the Nigerian currency continued to fall against the dollar, hitting a fresh all-time low on the parallel market in Lagos.
Despite rising forex reserves, the naira has been steadily declining since the beginning of this month, owing to the country’s ongoing foreign exchange scarcity.
On Wednesday, the naira lost value versus the US dollar on both the parallel market, the Investors’ and Exporters’ FX window.
The local currency, which was ₦526/$1 at the end of last month, dropped to ₦535/$1 on Wednesday in the parallel market, down from ₦532/$1 on Tuesday. Since August 4, when it ended at ₦506/$1, it has lost 5.73 per cent of its value.
On the parallel market, the naira fell to ₦730 against the British pound sterling from ₦727/£1 on Tuesday, while the euro rose to ₦629 from ₦626.
According to FMDQ Group, the naira fell by 0.20 per cent to ₦411.50/$1 in the I&E window on Wednesday.
The Financial Derivatives Company Limited stated that this window trades between 55 and 60 per cent of Nigerian forex transactions. It is used by the Central Bank of Nigeria, as well as most exporters and investors.
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According to CBN data, the country’s FX reserves have climbed steadily since August 25, gaining almost $1 billion in just 13 days.
The reserves, which had dropped to a record low of $33.09 billion on July 12, had risen to ₦34.49 billion as of September 6, the highest level since May 14, according to the statistics.
After dropping to ₦525/$1 on the parallel market on July 28, a day after the CBN halted selling foreign exchange to Bureaux de Change, the naira strengthened to ₦506/$1 on August 4.
Mr. Godwin Emefiele, the Governor of the Central Bank of Nigeria, announced the suspension of forex sales to BDCs on July 27 at the end of the Monetary Policy Committee meeting, claiming that they had become “agents that facilitate graft and corrupt activities of people seeking illicit fund flow and money laundering in Nigeria”.