Dollar sales at the Nigeria Autonomous Foreign Exchange Market on Friday decreased by $252 million to $84.1 million by Deposit Money Banks and other entities.
This is a 74% decrease from the $331.1 million in transactions that were registered at the official Nigeria Autonomous Foreign Exchange Market on Thursday.
In the meantime, the value of the naira dropped from N1,498/$ at the official market’s closing of trading on Thursday to N1,537/$ on Friday.
According to an analysis of data from FMDQ Security Exchange, FX turnover fell from $336.11 million on Thursday to $84.10 million on Friday, a 74% decrease. However, in addition to commercial banks, NAFEM also sees the sale of dollars by the Central Bank of Nigeria, oil companies, and global corporations.
The naira lost value on Friday at the parallel market due to a consistent demand for the US dollar, falling to N1,670/$ from N1,600/$ on Thursday.
Additional investigation for the week ended on Monday revealed that the supply began at a low of $116.11 million; on Tuesday, it rose by $292.3 million to $381.92 million, but on Wednesday, it fell to $117.87 million. The amount supplied rose to $336.11 million on Thursday.
According to the FMDQ report, during the first week of the CBN, banks encouraged others to sell $1.97 billion in the first week of the CBN circular which had mandated banks not to exceed a new threshold in their FX prudential guidelines.
The CBN has directed Deposit Money Banks to sell their excess dollar stock in a set of guidelines. Lenders were also cautioned not to hold surplus foreign currencies in order to make money.
The top bank issued new regulations on Thursday that prevented banks from giving their clients Personal Travel Allowance.
It further requested that International Oil businesses refrain from immediately repatriating all of their earnings to their parent businesses in a second circular, which was signed by the Director of the Trade and Exchange Department, Hassan Mahmud. In the third circular, the apex banks also reexamined their policies to prevent under- and over-invoicing of imports and exports.
However, difficulties in the forex market still exist despite the Central Bank’s efforts to increase the supply of foreign exchange through a variety of policy actions.
The difference between the rates in the official market and the parallel market is once again widening, raising concerns about the potential resurgence of round-tripping activities.
Banking institutions and IMTOs have begun the implementation, carrying out operational adjustments to accommodate the revised remittance framework by issuing notices to their customers in response to the circular
