Forex scarcity triggers  21% fall  in I&E turnover  to $1.68bn

Naira slides further as dollar shortage hits banks

At the backdrop of the dollar scarcity bedevilling the economy, volume of dollars traded (turnover) in the Investors and Exporters (I&E) window of the foreign exchange market fell by 21 per cent, month-on-month (MoM) to $1.6 billion in July 2023 from $2.64 billion in June.

Vanguard analysis of weekly transactions in the window as published by FMDQ showed that turnover stood at   $417.33 million in the first week of July and fell by 6.4 per cent to   $390.59 million in the second week.

In the third week, turnover increased by 6.05 percent to $414.24 million but    declined by 4.13 percent to $397.11 million in the fourth week.  

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On the last day of July turnover stood at $67.21 million.

Meanwhile, the naira appreciated by N12.31 to N756.94   per dollar in the I&E window at the end of July 2023 from N769.25   per dollar traded on June 30th, 2023.

However , the naira depreciated by N105 in the parallel market.

Vanguard gatherings showed that the exchange rate for the parallel market rose to N870 per dollar at the end of July   from N765 per dollar on June 30th, 2023.

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The sharp 21 per cent decline in turnover in the I&E window shows that the forex reforms introduced by the Central Bank of Nigeria, CBN,on June 14th 2023 is yet to translate into increased foreign exchange inflow into the country.  

However, the Acting CBN Governor, Mr. Ade Shonubi has assured that prevailing volatility of exchange rate in the I&E window will soon be a thing of the past, adding that the CBN will continue to intervene in the market to ensure stability. Addressing the press at the end of the meeting   of the Monetary Policy Committee, MPC in Abuja, Shonubi said: “ We have started intervening and we have been doing it for a while and we will continue to intervene to bring the market to the level that we believe it should be. Right now and in the short run these volatile times are expected but we expect them to moderate sooner rather than later.”  

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