Pressure On Naira Moderates As Dollar Supply Improves

The persistent pressure on the naira is beginning to moderate across foreign exchange market as dollar supply improves.

Dollar was quoted at N745 during the trading session on Tuesday. Although this represents N1 or 0.13 percent loss compared to N744/$ quoted on Monday at the parallel market, traders said the rate may likely strengthen on the next trading day (today).

“There are dollars in the market now but demand is not as much as it was last month,” a trader told BusinessDay.

At the Investors and Exporters (I&E) forex window, naira gained 0.11 percent as dollar was quoted at N446.00 on Monday compared to the last close of N446.50/$ on Friday, data from the FMDQ revealed.

Most foreign exchange dealers who participated at the auction on Monday maintained bids between N439.96 and N452.00 per dollar.

Daily foreign exchange market turnover declined by 51.85 percent to $78.08 million on Monday from $162.17 million recorded on Friday.

The moderation in forex pressure and the improved dollar supply comes as the new naira notes will be dispensed by banks on Thursday, as directed by the CBN.

“We saw the naira experience calm in demand in the foreign exchange market as Bureau De Change operators cut rates in a bid to attract users of the greenback just as we inch closer to the official date of the release of the redesigned naira notes by the CBN,” analysts at Cowry Asset Management said.

Source: Business Day

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