On Wednesday in the official market, the value of the naira slightly increased in relation to the US dollar, reaching N1,609 from N1,615.94 the day before.This suggests a 0.37 percent, or N6, rise.
The PUNCH reported that, the Central Bank of Nigeria released a set of foreign exchange recommendations in recent weeks, which preceded the minor improvement.
In the meanwhile, the Monetary Policy Committee increased the benchmark interest rate or Monetary Policy Rate by 400 basis points on Tuesday, bringing it from 18.75 percent in July 2023 to 22.75 percent.
It also increased the Cash Reserve Ratio from 32.5 percent to 45.0%, maintained the Liquidity Ratio at 30%, and modified the asymmetric corridor surrounding the MPR to +100/-700 basis points from +100/-300 basis points.
The naira declined by 2.04% on Tuesday, according to data from the FMDQ securities exchange, after the dollar was quoted at N1,615.94 on Tuesday, down from N1,582.94 on Monday at the Nigerian Autonomous Foreign Exchange Market. This suggests that the anticipated impact of the rate hike has not yet materialized on the official foreign exchange.
The naira fell to N1,615.94/dollar on Tuesday from N1,582.94 on Monday, according to data from FMDQ.
With reference to the N1,582.94 reported at Monday’s conclusion of trading, this denotes a N30, or 2.0%, depreciation.
The intraday high during spot trading on Wednesday was N1,660, down from N1,778/$ on Tuesday and N1,805/$1 on Monday. However, from Tuesday and Monday’s intraday lows of N1,301 and N1,401, respectively, the intraday low increased.
The daily FX market turnover did, however, further decreased to $119.14 million from $154.16 million on Tuesday and $166.58 million on Monday.
In an explanation, BDC operator Malam Ibrahim stated that “the rates had fluctuated at least seven times prior to the conclusion of trade.
“Nobody can tell you the real price at the moment since you may compare up to seven quotes in a matter of minutes and a day. Right now, the naira is basically an up-and-down pendulum.
“We are trying to find purchasers, but most of our clients are trying to sell their dollars, and no one is interested in buying. That therefore, is the issue, he stated.”
On Wednesday, however, the naira fluctuated during the day between N1,300, N1,450, and N1,500, as opposed to Tuesday’s N1,550 swapped on the underground market.
The scenario was corroborated by another BDC operator, who said that traders’ desire to engage has decreased due to the regular raids by security personnel.
As of Wednesday night at nine o’clock, BDC operators still had not received the guaranteed cash allocation from the CBN.
The CBN has listed over 1300 BDCs for allocation; however, the reason is yet unknown.
In a circular on Tuesday, the CBN committed to selling $20,000 at a cost of N1,301/$ to every BDC.
Selling to end customers at a margin not to exceed one percent above the CBN purchase rate is permitted for BDCs.
