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Naira crashes to N570/$1 as foreign reserves gain $600m in one week

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Naira

Nigeria’s local currency, Naira, according to reports by NairaWatch, faced severe pressures last week, forcing it to seriously depreciated against the US Dollar in both the parallel market and Investors and Exporters (I&E) window.

The reports had it that the exchange rate between Naira and Dollar as at Friday, September 17, stood at ₦570/$1 in the parallel market.

According to them, in the I&E window, the Naira depreciated by 88 kobo as the indicative exchange rate dropped to N412.88 per dollar on Friday from N412 per dollar the previous week.

Also, the volume of dollars traded (turnover) in the window rose by 35 per cent to $975.63 million last week from $724.11 million traded the previous week.

Recall that this came at the backdrop of the $600 million accretions to the nation’s foreign reserves during the week.

The data on the CBN’s website showed that the nation’s foreign reserves gained $600 million as the gross amount rose to $35.4 billion on Friday from $34.8 billion the previous week. The liquid amount also grew by $600 million to $35.1billion on Friday from $34.5 billion the previous week.

The Monetary Policy Committee (MPC), however, lauded the apex bank on the management of exchange rate thereby urging the apex bank to take further steps to restrict the activities of unauthorised and illegal dealers in the foreign exchange market.

The communiqué of the MPC meeting held last week in Abuja said: “On the management of the exchange rate, the Committee applauded the Bank for improving foreign exchange supply in the economy to meet legitimate business and consumer demand.

“Members thus, urged the Bank to take further steps to restrict the activities of unauthorised and illegal dealers in the foreign exchange market, stating that all foreign exchange transactions must be conducted at the I&E window to ensure transparency and stability. 

“The Committee, thus, called on the Bank to intensify surveillance over foreign exchange sales and utilisation by commercial banks and customers, to ensure that operators adhere to stipulated guidelines set by the CBN. 

“The bank thus, maintains its resolve to continue to restructure the foreign exchange market and will pursue all recent policies targeted at sanitizing the market to improve transparency and proper functioning to eliminate illegal foreign exchange dealers in the economy.”

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