Dollar scarcity forces naira to crash massively as APC Convention holds today

Dollar scarcity has forced the naira to crash massively as APC Convention holds today at Eagles Square, Abuja.

IDOMA VOICE reports that the exchange rate between the naira and the US dollar closed at N420.25/$1 at the Investors and Exporters (I&E) window.

Barely 24 hours to APC Special Convention and Presidential Primary where delegates are expected to vote for their preferred Presidential Aspirant in the primaries election, the naira depreciated massively by 0.12% on Monday to close at N420.25/$1 at the Investors and Exporters window. The fall in the local currency follows a 73.4% decline in FX supply in the market to a 2-month low due to massive scarcity of the foreign currency in the official and black markets.

According to our reporter who visited some of the banks in Lagos and Abuja to source for FX, banks are short of dollars and can’t meet the fx demands of their customers.

‘We don’t have even one dollar to pay our customers, I don’t know where they took all our dollars’, one of the banks’ FX attendants told our reporter in Ogba, Lagos state.

Also, IDOMA VOICE reports that forex turnover at the official market dropped by 73.4% to $49.24 million on Monday compared to $185.1 million traded on Friday, last week.

Meanwhile, the exchange rate remained stable in the parallel market, closing at N606 to a dollar on Monday, the same as recorded on Friday, 3rd June 2022. This is according to information from BDC operators in Nigeria.

The exchange rate at the P2P market appreciated by 0.18% to trade at N602.5/$1 in the early hours of Tuesday, compared to N603.6/$1 recorded on Monday.

Meanwhile, Nigeria’s external reserves fell by 0.04% on Friday, 3rd June 2022 to stand at $38.46 billion from $38.48 billion recorded as of the previous day. The nation’s external had been on a downturn since 25th April 2022 largely due to the continuous intervention by the Central Bank in the FX market in order to ensure the stability of the local currency.

Trading at the official NAFEX window

The exchange rate depreciated by 0.12% on Monday to close at N420.25/$1 from N419.75/$1 recorded on Friday.

The opening indicative rate closed at N420.1/$1 on Monday, 6th June 2022, representing a N0.40 downturn compared to N419.7/$1 recorded in the previous trading session.
Furthermore, an exchange rate of N444/$1 was the highest rate recorded during intra-day trading before it settled at N420.25/$1, while it sold for as low as N413/$1 during intra-day trading.
A total of $49.24 million in FX value was traded in the official I&E window on Monday, representing a 73.4% decrease compared to $185.1 million traded as of the previous trading session.