Exchange Rate Weakens To N482/$1 As Traders React To Naira4Dollar Scheme

The exchange rate between the naira and the US Dollar on Monday 8th March 2021 closed at N411.88/$1 at the Investors and Exporters window

Naira depreciated yet again to a record low of N411.88/$1 on Monday 8th March 2021 at the NAFEX window, representing a 0.21% decline when compared to N411/$1 recorded on the previous trading day.

Also, Naira dipped against the US Dollar in the parallel market to close at N482/$1 on Monday, March 8th 2021. This represents a N2 depreciation when compared to N480/$1 recorded on Friday, 5th March 2021.

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BlazeNewz reports that the central bank announced a Naira4Dollar scheme where beneficiaries of diaspora remittances will be paid N5 for every $1 remitted via the banks.

Though still early days, traders appear to have ignored the likely effect of the policy as the scarcity of dollars on the streets of major cities in Lagos forced prices to weaken.

Trading at the official NAFEX window

The Naira depreciated against the US Dollar to a record low at the Investors and Exporters window on Monday to close at N411.88/$1. This represents an 88 kobo decline when compared to N411/$1 recorded on the previous trading day.

The opening indicative rate closed at N411.64 to a dollar on Monday. This represents an 86 kobo gain when compared to N412.5/$1 recorded on Friday.

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Also, an exchange rate of N412 to a dollar was the highest rate during intra-day trading before it closed at N411.88/$1. It also sold for as low as N390/$1 during intra-day trading.

Forex turnover at the Investor and Exporters (I&E) window dropped by 61.2% on Monday, 8th March 2021.

According to the data tracked by Nairametrics from FMDQ, forex turnover decreased from $83.93  million recorded on Friday, March 5, 2021, to $32.58 million on Monday, March 8, 2021.

ABCON Reacts to Naira4Dollar

The members of The Association of Bureau De Change Operators of Nigeria (ABCON) have weighed in on the Naira4Dollar scheme of the CBN. Its President of ABCON, Alhaji Aminu Gwadabe said the policy will help improve forex liquidity.

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Gwadabe said: “There is no doubt the incentive will be somehow attractive to the targeted beneficiaries of the remittances and therefore aimed to address concerns of one of the principal ally in the chain of remittances.

“This, therefore, suggests that it is a window, if well-articulated and includes all the principal allies in the remittances space, will help the Nigerian economy for the availability of FX liquidity”.