Omodele Adigun with agency report
As Nigerian companies continue to grapple with dollar shortages to import needed raw materials, wired transfers cost has inched up to N477/$1, an additional N2 premium.
Wired transfers represent non-cash forex transactions between a buyer and a seller without going through official channels. Wired transactions occur through bank accounts and usually cost more.
Dollar scarcity has been rocking the country for some time now after oil prices nosedived in the wake of the coronavirus pandemic, hitting Nigeria’s major foreign exchange earner and shifting demand to the black market. This has triggered increasing disparity between the official rate and the black market rates. This week alone, the exchange rate disparity between the parallel and black market hit a high of N85.75
For instance on Tuesday, the exchange rate disparity between the official NAFEX rate and the black-market rate was as wide as N85.75. Nigeria maintains multiple exchange rates comprising the CBN official rate, the BDC rates, SMIS, and the NAFEX (I&E window).
The exchange rate at the NAFEX window appreciated to N389.25 during intraday trading on Wednesday, July 29, 2020. In contrast, the exchange rate at the parallel market remained unchanged for the second day in a row after hitting a new low on Monday, July 27 when it closed at N475/$1.
At the black market where forex is traded unofficially, the Naira remained unchanged for the second consecutive day against the dollar after closing at N475/$1 on Wednesday, according to information from Abokifx, a prominent FX tracking website. This was the same rate that it exchanged on Tuesday, July 28. Some traders contacted by Nairametrics research also confirmed the same price as N475/$1.
NAFEX: The Naira appreciated against the dollar at the Investors and Exporters (I&E) window on Wednesday, closing at N389.25/$1. This represents a 25 kobo gain when compared to the N389.50 rate close reported on Tuesday, July 28. The opening indicative rate was N388.61 to a dollar on Wednesday. This represents a 17 kobo drop when compared to the N388.44 to a dollar that was recorded on Tuesday.
The Naira fell to as low as N392.50 during intraday trading before strengthening to the closed rate of N389.25. It also sold for as low as N380/$1 during intraday trading. Forex is sold at several prices during the day.
The 0.4 per cent depreciation week-on-week (it was N388.5/$1 coming into last week) is perhaps attributed to the weaker forex turnover that was experienced last week. Meanwhile, forex turnover at the Investor and Exporters (I&E) window recorded a decline on Wednesday, July 29, 2020, as it dropped by 52.1 per cent day-on-day.