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CBN’s new policy strengthens naira at the parallel market as local currency takes reverse gear

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CBN
Governor, CBN, Godwin Emefiele

The Central Bank of Nigeria (CBN’s) new policy has strengthened Nigeria’s Naira at the parallel market, making it to appreciate against the United States’ dollar.

Techeconomy.ng can report that the naira’s exchange rate closed at N490/$1 at the parallel market on Tuesday, December 1.

This represents N10 gain when compared to the N500/$1 that it exchanged for on Monday, November 30.

This medium can report that CBN’s new policy on diaspora remittances might have started having a significant impact on the black market.

NairaWatch

The directive implied that Nigerians who receive foreign transfers such as Western Union or Moneygram can withdraw it in dollars and then sell at the black market rate or wherever they want to.

On the other hands, the Naira’s exchange rate at the NAFEX window depreciated against the dollar to close at N394/$1 during intra-day trading on Tuesday, December 1.

This represents N3.75 when compared to the N390.25 that it exchanged for on Monday, November 30.

The opening indicative rate was N391.70 to a dollar on Tuesday. This represents N1.35 drop when compared to the N390.35 that was recorded on Monday.

The N396 to a dollar was the highest rate during intra-day trading before, it still closed at N394 to a dollar. It also sold for as low as N380/$1 during intra-day trading.

Forex turnover at the Investor and Exporters (I&E) window increased by 379.6% on Tuesday, December 1, 2020

Recall that the local currency had strengthened by about 7.8% within one week in September at the black market, as the CBN introduced some measures targeted at exporters and importers.

ALSO READ  CBN says 2019 saw worst global economic growth of the decade

The parameter was to boost the supply of dollars in the foreign exchange market and reduce the high demand for forex by traders.

The CBN had sold over $1 billion to BDCs since they resumed forex sales on Monday, September 7, 2020.

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