Finance

Naira weakens to 770.38/$ at official market

Naira exchange rates August 2023

The naira slumped further to the dollar after closing at 770.38/$ at the end of trading on the investor & exporter forex window on Monday.

According to figures obtained from the FMDQ on Monday, the trading rates had closed at N686.96/$ on Friday.

Trading opened at N703.50/$ and hit a high of N799/$ before closing at N770.38/$.

The I& E forex window recorded a total turnover of $78.03m at the close of trading on Monday.

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The Central Bank of Nigeria, last week directed Deposit Money Banks to remove the rate cap on the naira at the I&E window to allow for a free float of the national currency against the dollar and other global currencies.

The banking regulator explained its new forex operation in its report on ‘Understanding the operational changes to the foreign exchange market’.

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By collapsing all segments in the FX market into the I&E window, it said this meant all eligible FX transactions in the market would only be done via the I&E window, as all other windows ceased to exist.

“The I&E market functions by a willing buyer, willing seller system, where an entity with demand for FX seeks out another entity with FX to sell at an agreed price through an authorised dealer,” the CBN stated.

On the concept of the willing buyer and willing seller model, it explained that the rates were mutually agreed by both parties.

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The CBN said PTA, BTA and other invisible transactions would continue to be accessed through the banks at the prevailing market rate.

Punch

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