FOREX: Exchange Rates Converge As I&E Window Records $2.5bn Turnover

By Nse Anthony-Uko
ABUJA, (Sundiata Post) – Naira converged at almost all the several windows in the foreign exchange market at the weekend as the supply of dollars from the Central Bank of Nigeria (CBN) into the Investors and Exporters (I&E) forex window continued to increase hitting a turnover $2.5 billion.
The naira at the weekend traded at N368 to the dollar at the black market closer to the N362 and N360 at which bureau de change operators and banks sold to their customers respectively.
The value of the naira at the I&E window which had hovered between N389 and N370 closed last week Friday at N366.16 to the dollar.
At the interbank window, the value of the naira depreciated slightly from N305.60 which it began the week to N305.85 to the dollar.
The I&E window which was opened on April 21, 2017 and had contributed immensely to increased liquidity at the foreign exchange market had recorded a cumulative turnover of over $2.5 billion since its inception.
The CBN also in the last two weeks sold $1.026 billion in foreign exchange to meet demand for forex at the whole sale and retail market as well as for small businesses. Compared to $831.5 million which it sold two weeks ago, the CBN sold $195 million last week.
$100 million had been allocated to dealers in the wholesale window while $50 million was allotted to Small and Medium Enterprises (SMEs) window and $45 million to the Retail end of the market to meet invisible demands for Business/Personal Travel Allowances, school tuition, medicals.
At the FMDQ OTC Futures segment, the lacklustre performance which has been recorded in recent weeks continued as investor appetite remains dampened by the upward revision of contract prices. Also, the last of the initial 12 contracts which were issued in June 2016 following the adoption of a “flexible exchange rate regime” matured during the week and notably, none of the contracts which were worth US$1.0bn each was completely subscribed within this period.
Traders at the forex market say they believe the stability in the forex market will be sustained in the short to medium term as the CBN continues its drive to boost forex liquidity in the markets. The apex bank which has regularly sold $40,000 to each bureau de change operator is expected to continue to push foreign currency supply this week.

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