Naira depreciates across forex markets, as external reserves shed $838m in six weeks

Naira weakened marginally against the dollar on the black market on Wednesday, falling by N1 or 0.21% to N476, data from abokiFX, an exchange rate tracking website, showed.

The U.S. currency had exchanged for N475 on Tuesday.

Nigeria’s external reserves had fallen by $838 million or 2.35% to $34.851 billion in the six weeks to 14^th December, weakening the central bank’s ability to intervene in the foreign exchange market.

Meanwhile, on the spot market also called the Investors and Exporters (I&E) forex window, naira depreciated by 67 kobo or 0.17%, changing hands at N394.67 to a dollar. That leaves the gap between the exchange rates of the two markets at N81.33 or 20.61%.

Read also: Naira depreciates against dollar at I&E window amid fall in forex supply

Yet, traders have been thronging the parallel market where dollar is much more expensive because the quantity available at the spot market is grossly inadequate to meet their demand.

Naira had closed at N394 at the Tuesday session.

Turnover at the I&E forex window rose by 78.7% to $200.34 million from $112.08 million.

Naira reached an intraday low of N407.68 to a dollar and hit a high of N388 before closing at N394.67.

Last week, the average daily forex sale was around $169.93 million, signalling a significant rise from the $34.5 million reported in the week before. However, the apex bank’s interventions in the market have failed to stop naira from weakening.

On Tuesday, the Nigerian government got approval for a $1.5 billion loan facility from World Bank, which is anticipated to shore up the country’s fast depleting foreign exchange reserves.

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