Fakoyejo OlalekanThe foreign exchange (Forex) rate in the official market settled at ₦464 per Dollar on Friday, 14 April 2023, as the United States currency increased in value.
Prime Business Africa learnt from data obtained from the FMDQ Exchange that the cost of the Dollar rose by ₦1.17 kobo from ₦464/$1 rate reported on Thursday, 13 April.
Join our WhatsApp ChannelThis means the value of the Naira fell in the official market by -0.25 per cent, indicating traders had to part with more Naira than they did the day before.
However, before the foreign exchange rate closed at ₦464/$1 on Friday, both the Nigerian and United States currencies had exchanged at a peak of ₦466/$1 and a low of ₦460/$1 during intra-day trading.
As the cost of the Dollar increased in the Central Bank of Nigeria (CBN) backed forex market, the value of transactions fell drastically.
It was gathered that on the Investors and Exporters window, traders traded $62.16 million, as against the $131.33 million worth of transactions recorded on Thursday.
This shows that the supply Dollar to the investors and exporters window fell by 52.7 per cent. In monetary terms, this is a $69.17 million drop.
The drop in the supply reflects the shortage of Dollars in Nigeria where foreign capital importation has fallen due to policies by the Federal Government and the geopolitical tensions across the World.
According to the International Monetary Fund (IMF), the war between Russia and Ukraine as well as the trade tensions between the United States and China are redirecting foreign investments from Nigeria and other developing countries.
This will reduce the inflow of foreign currencies into the country, thereby making it difficult for traders to access forex. The scarcity will further fuel the value of the Dollar and the depreciation of the Naira.
The IMF said the foreign investments are going to countries that are politically aligned. IMF suggested that countries losing this foreign capital importation should use the opportunity to seek new foreign investments.
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