Amid calm volatility in the foreign exchange market, the Nigerian naira has been trading steadily against the US dollar (U.S.) on the investor and exporter window, as traders continue to analyze different exchange rates.
According to data from the FMDQ platform, the exchange rate remains at 464.67 naira per dollar on the Investor and Exporter FX window. Demand for the greenback was accompanied by a reasonable level of foreign exchange in the market, keeping rates steady for the second day in a row. Even so, traders expect the naira to depreciate.
Although this is undesirable due to the low economic temperature, some investment banking firms argue that the local currency is still overvalued. Last year, the Nigerian naira lost 10% of its value after the apex bank allowed last-minute censorship of the forex window for investors and exporters.
Recent developments in the forex market show that the apex bank is uncertain about the rate direction after selling US dollars at a higher rate to market participants in its auctions.
Last week, the apex bank spot rate was adjusted to N630, indicating a devaluation of the local currency. However, the monetary authority denied that the naira had been devalued.
The development has seen both supply and demand adjust moderately, with dollar trading volume matching existing currency liquidity. But data shows that the naira was sold as high as 645 naira in the United States, as reported by Reuters. President Bola Tinubu has previously hinted at the need for proportional convergence.
The local currency was unchanged in value on Monday, while the indicated opening rate closed at 464.96 naira against the dollar on Tuesday.
The 467 naira to dollar exchange rate was the highest recorded in the transaction the day before when it stood at 464.67 naira. The naira is sold for as low as 460 naira for one dollar in intraday trading. According to data from trading platform FMDQ, a total of $186.02 million was traded at the official investor and exporter window on Tuesday.