The Naira yesterday depreciated by 16 per cent to N770.38 per dollar in the Investors and Exporters (I&E) window following a surge in demand for dollars worsened by acute supply shortage.
Data from the FMDQ showed that the indicative exchange rate for the window rose to N770.38 5 per dollar from N663.04 per dollar last week Friday, indicating N107.34 depreciation for the naira.
But in the parallel market, yesterday, the naira appreciated from N4 to N755 per dollar from N759 per dollar last week.
Consequently, the I&E exchange rate surpassed the parallel market exchange rate for the first time since 2019, the I&E exchange rate was.
Forex market sources revealed that the depreciation was majorly due to a surge in demand buoyed by over $3.7 billion matured Letters of Credit, LCs. The situation they stressed is worsened by supply shortage as the I&E window is yet to see significant forex inflow since the Central Bank of Nigeria, CBN, reintroduced the willing seller, willing buyer model.
According to a source, the volume of transactions is still very scant and they are from people who have urgent forex needs and are willing to buy at any exchange rate. Some of them were already used to buying dollars at the parallel market rate, and hence are used to buying dollars at above N700 per dollar.
The development in the I&E window follows the new forex measures announced by the CBN on Wednesday.
Announcing the new measures in a statement titled, “Operational Changes to the Foreign Exchange Market”, Director, Financial Markets, Dr. Angela Sere-Ejembi, said, “The Central Bank of Nigeria (CBN) wishes to inform all authorized dealers and the general public of the following immediate changes to operations in the Nigerian Foreign Exchange (FX) Market:
“Abolishment of segmentation. All segments are now collapsed into the Investors and Exporters (I&E) window. Applications for medicals, school fees, BTA/PTA, and SMEs would continue to be processed through deposit money banks.
