The exchange rate between the dollar and naira closed at N741.5/$1 at the official investor and exporter window on Monday, July 3rd, 2023.
The forex market opened at N760.39/$1 and sold for an intra-day high of N792/$1 before closing at N741.5/$1. It also sold for an intraday low of N696.37/$1.
This is also the first time we have seen the exchange rate sell for above N460/$1 since the relaunch of the Investor & Exporter Window back on June 14th, 2023.
Big gains – Monday’s closing represents a gain of 3.61%, the strongest since June 16th when it gained 5.58%, and a strong sign that supply may be gradually recovering. Meanwhile, forex turnover was the lowest in 5 days at just $88 million
- On the parallel market where the dollar is traded unofficially, the naira closed at N772/$1 representing a N31 disparity from the official rate.
- On the P2P market where the dollar is traded with cryptocurrency, it sold for around N775/$1.
Official disparity closing: Meanwhile, the intra-day low rate of N696.37/$1 is the weakest we have seen since the revised I&E window commenced suggesting that the disparity reported by Nairametrics last week is being addressed.
- Nairametrics had reported that the foreign exchange traders at the official investor and exporter window had raised concerns about the persistent trade of forex at an intra-day low of approximately N460-N465/$1.
- The significant disparity between the intra-day highs, intra-day lows, and the closing rate has left traders suspicious, with some suspecting foul play, according to sources from Nairametrics.
- We had also reported that regulators were examining the issues and planned to address them this month if they persisted.
The intra-day low rate of N696.37 suggests this may have been addressed.
External Reserves: Nairametrics earlier reported that the external reserve has fallen by about $2.8 billion in the first half of 2023 as Nigeria continues to struggle with weak crude oil output and a lack of foreign investor participation in the capital market.
- The external reserves opened the year at about $37 billion but have now dropped to about $34.1 billion as of June 2023.
- Nigeria’s external reserve is an important barometer for valuing the country’s currency. It is also used to estimate how many months of imports it can finance.
- The naira’s exchange rate has a significant impact on Nigeria’s economy, as it affects the prices of goods and services, inflation, exports, imports, foreign reserves, and external debt.
A stable and realistic exchange rate is desirable for economic growth and development.
