The fall of the naira continued on Wednesday, as the local currency was weakened against the dollar at the parallel market.
According to information obtained from Abokifx, the naira depreciated to N453 to a dollar at the parallel market, otherwise known as the black market, on Wednesday, June 17, 2020. This shows a marginal drop of N1 when compared to the N452 to a dollar that was exchanged the previous day.
The drop in the value of the naira at the black market can be attributed to the pressure in the foreign exchange market, especially by currency speculators.
In a related development, the naira remained stable against the dollar at the Investors and Exporters (I&E) window, trading at N386 to a dollar on Wednesday, June 17, 2020. This was the same rate it exchanged the previous day. The opening indicative rate of N386.39 represents a loss of N1.00 to a dollar when compared to the opening rate of N387.39 that was recorded on Tuesday, June 16, 2020.
A further look at information from FMDQ shows that there is an increase in daily forex turnover to $16.06 million as against the $15.31 million which was recorded the previous day. This represents an approximately 5% increase in market turnover.
The volatility in the foreign exchange market continued and is compounded by the drop in dollar supply due to revenue shortages emanating from a crash in crude oil prices. The Federal Government disclosed plans to unify the exchange rate in order to generate more revenue and manage the rate in a sustainable manner. This may also have fed into speculator sentiments in the black market. The CBN has repeatedly remarked that it has no immediate plans to devalue the naira.