The Naira to USD exchange rate reached a two-month intraday high of 851 Naira/$1 on September 26, 2023 on the Investor and Exporter (I&E) window, the official platform for foreign exchange trading. did.
This peak is noteworthy because the last time the naira traded at a higher intraday rate was on July 24, when it reached 855 naira to the dollar.
Market volume on the day soared to $135.9 million, up from $64 million the previous day.
In contrast, despite the decline in the black market, the exchange rate at the official I&E counter actually showed signs of improvement. The price rose to 755 naira to the dollar, a significant improvement from the previous day’s closing price of 773.25 naira to the dollar.
On the other hand, the parallel market, often seen as a barometer of business confidence, tells a less rosy story. On the same day, the country’s exchange rate plummeted to an unprecedented low of 1,000 naira to the dollar.
The resignation coincided with the Senate’s confirmation of Dr. Yemi Cardoso as the new Governor of the Central Bank of Nigeria (CBN).
This evolving scenario has further widened the gap between the official market rate and the parallel market rate, which currently stands at a staggering 245 Naira per dollar and continues to rise.
Such large differences have raised concerns about the potential for foreign currency round trips, where money is exchanged through illicit channels to exploit rate differences.
Financial industry insiders who spoke to Nairametrics emphasized the potential vulnerability this large disparity poses to domestic foreign exchange stability, adding that there is a strong possibility that a foreign exchange round trip is occurring. suggested something.
One of our sources said that the round-trip trading of currencies could be contributing significantly to existing market distortions, further exacerbating the scarcity of the dollar and the rise in Naira-to-Dollar rates seen in the foreign exchange market. It suggests that there is a sex.
This scarcity poses a challenge for legitimate businesses seeking access to foreign currency for important transactions.
Meanwhile, the Senate has approved the nomination of Dr. Olayemi Cardoso as the next Governor of the Central Bank of Nigeria (CBN).
This follows a review by the upper house of parliament. The Senate also approved the nominations of four deputy governors of the CBN.
The four deputy governors whose appointments were confirmed by the Senate are Mr. M Usoro, Mr. Muhammad Dattijo, Mr. Philip Ikeasor and Mr. Bala Bello.
