Foreign exchange inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) receded last week as the value of the naira further slumped at both the official and parallel ends of the market.
Having surged by 66.7 per cent the previous week to $2.2 billion after banks complied with the new directives of the Central Bank of Nigeria (CBN), inflows at the official end also known as the Investors’ and Exporters’ (I&E) window slumped by 58.1 per cent to $1.2 billion at the end of trading last week.
This is despite the interventions in the market by the CBN as well as its recent circulars which were meant to reduce demand pressure at the official end of the market.
The CBN had earlier issued a series of circulars and guidelines with new macroprudential limits for net open positions as well as removing restrictions on International Money Transfer Operators (IMTOs) exchange rate quotes as part of efforts to boost liquidity and curb the volatility in the foreign exchange market.
Last week, it issued three new circulars, which included barring International Oil Companies (IOCs) from repatriating all their crude oil proceeds at once as well as bans from paying Personal and Business Travel Allowance (PTA/BTA) in cash.
Despite all these measures, the value of the naira closed weaker in spite of about $170 million that the CBN sold to banks during the week.
At the official window, the naira depreciated by 4.4 per cent against the dollar to close at N1,537.96, while it closed trading at the parallel market at N1,625 to the dollar, a 9.5 per cent depreciation compared to what it opened the week’s trading with.
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