The exchange rate at the parallel market fell to another new 3-year low closing at N470/$1 on Wednesday, July 15, 2020. However, on the officially recognized NAFEX Market, the forex turnover rose by 44.9% while the exchange rate depreciated closing at N386.50/$1.       

Parallel Market: At the black market where forex is traded unofficially, the Naira depreciated by N5 to a dollar to close at N470 to a dollar on Wednesday, according to information from Aboki FX a prominent FX tracking website. This is against the N465 that it exchanged on Tuesday. However, during intraday trading, Nairametrics research observed the dollar sold for as high as N470/$ and as low as N465/$1. Nairametrics FX tracker also reported a parallel market FX rate of N470/$1.  

NAFEX:  The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Wednesday, closing at N386.50/$1, compared with the N386 that was reported on Tuesday, July 14. The opening indicative rate was N387.75 to a dollar on Wednesday. This represents a 17 kobo gain when compared to the N387.92 to a dollar that was recorded on Tuesday.     

Nigeria maintains multiple exchange rates comprising the CBN official rate, the BDC rates, SMIS, and the NAFEX (I&E window). Nairametrics reported a few weeks ago that the government has set plans in motion to unify the multiple exchange rate in line with requirements from the World Bank. Nigeria is seeking a world bank loan of up to $3 billion. The country has been under pressure from the International Monetary Fund and the World Bank for currency reforms.     

Forex Turnover         

Meanwhile, forex turnover at the Investor and Exporters (I&E) window recorded an increase on Wednesday, July 15, 2020, as it rose by 44.9% day on day. According to the data tracked by Nairametrics, forex turnover rose from $12.91 million on Tuesday, July 14, 2020, to $18.71 million on Wednesday, July 15, 2020. Although there was an improvement, the low turnover reaffirms the scarcity of dollars and an indication of the liquidity pressure in the foreign exchange market. This also is a far cry from an average of $200 million recorded at major trading days during the last few weeks.