Naira Strengthens Against Dollar at I&E Window Amid High Demand

Ilesanmi AdekanbiJune 21, 2023

1 minute read

The Nigerian Naira appreciated against the US Dollar at the Investors and Exporters (I&E) window on Tuesday, June 20, 2023, trading at N756.61 per dollar. This represents a 1.79 per cent increase compared to N770.38 per dollar on Monday, June 19, 2023.

According to data from the FMDQ Securities Exchange, the open indicative rate closed at N701.75 per dollar on Tuesday, showing a significant gap between the official and parallel market rates.

The highest rate recorded within the day’s trading was N781 per dollar, while the lowest rate was N465 per dollar. A total of $134.47 million was traded at the I&E window on Tuesday.

The Naira’s performance at the I&E window reflects the high demand for foreign exchange in the country, as well as the scarcity of dollars in the market.

The Central Bank of Nigeria (CBN) has been intervening in the market to ease the pressure on the local currency, but its efforts have not been enough to bridge the gap.

The CBN’s official exchange rate for the dollar stood at N588.9 per dollar as of Tuesday, while the parallel market rate was N760 per dollar, according to data from Xe.com. This means that there is a difference of about N171.1 between the official and black market rates.

The Naira has been depreciating against the dollar since last year, when the CBN devalued the currency twice due to the impact of the COVID-19 pandemic and the fall in oil prices. The CBN has also adopted a flexible exchange rate regime, which allows market forces to determine the value of the Naira.

However, analysts have argued that the CBN needs to do more to unify the exchange rates and improve liquidity in the market.

They have also called for structural reforms and diversification of the economy to reduce dependence on oil revenues and boost foreign exchange earnings.