Naira strengthens against dollar, closes at N740/$ at I&E window

The naira, Nigeria’s legal tender, closed at N740.08 per dollar at the investors and exporters (I&E) window on Wednesday.

The I&E foreign exchange (FX) window is the market trading segment for investors, exporters and end-users that allows for FX trades to be made at exchange rates determined based on prevailing market circumstances. It is the country’s official FX market.

According to FMDQ Securities Exchange Limited, a platform that oversees FX trading in Nigeria, the closing rate represents a 6.49 percent appreciation from the N791.42/$ recorded on Tuesday.

The development comes a day after the Central Bank of Nigeria (CBN) monetary policy committee (MPC) meeting.

Since the float of the naira, there have been consistent fluctuations in the FX rates with no sign of stability at the official window.

Folashodun Shonubi, acting governor of the apex bank, who addressed journalists at the end of the meeting on Tuesday, assured that the “volatile times” in the FX market would soon moderate.

“We believe that we need to encourage the markets to be more efficient and to be more effective and that [it] takes a bit of time,” he had said.

“Some of the volatility you’ve seen over the period has been driven by that same fact that the market needs to find its level and also the reality that there’s pent-up demand which current supply may not be sufficient for and as we ease and satisfy the pent-up demand, [we] will begin to see a more efficient market that runs.

“We also need to understand the dynamics of pricing in the market. We feel we should actually stop calling it the investors and exporters (I&E) widow because it is now much more than the I&E.

“It’s a market where everybody and anybody through the licensed institutions can participate. So, we expect that over time, sooner rather than later the volatility you are seeing would normalise.”

Meanwhile, at the parallel/black market where the dollar is traded unofficially, the naira traded within a range of N860-N865 per dollar in Lagos on Wednesday.