Naira strengthens against dollar at black market amidst improved forex supply

Naira recorded a modest gain against the United States dollar at the parallel market on Monday, closing at N458, 1.5% stronger than its close at the previous session, standing at N465, data from abokiFX, which collates rates from street traders, showed.

The flow of dollar supply into the Bureau de Change segment of the currency market through the Central Bank of Nigeria’s latest sales round to operators supported the gain.

Meanwhile, the local currency weakened by N0.20 against the greenback at the over-the-counter spot market used by investors and exporters, closing at N385.80 relative to its Friday’s close, which was N386.

Naira touched an intraday high of N380 and low of N393.01 before settling at N386.

Read also: Naira gains against dollar at black market, weakens at I&E forex window

Turnover at this side of the market contracted by 64.5%, falling from $102.02 million to $36.24 million.

Last week, on this side of the market, the volume of trade averaged $169.93 million daily compared to the $34.5 million reported a week earlier.

Turnover tumbled to $857 million in August from $937 million.

The Central Bank in its recently released Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for Fiscal Years 2020/2021 expected Nigeria’s foreign reserves, which opened the year at $38.100 billion in January, to fall between $29.9 billion and $34 billion by year end, stoking fears of low liquidity.