By Elizabeth Adegbesan
The volume of transactions (turnover) in the Investors and Exporters (I&E) window of the Nigerian foreign exchange (forex) market fell by 32 per cent, in nine months (January – September 2021) to $20.25 billion from $26.8 billion in the corresponding period of 2020.
Financial Vanguard findings from the forex data of the Central Bank of Nigeria, CBN, showed that in the first quarter of the year (Q1’21) turnover stood at $3.7 billion.
In Q2’21, turnover rose sharply by 80 percent to $6.64 and up again by 49 per cent to $9.91 billion in Q3’21.
However, the data indicated that Year-on-Year (YoY) turnover fell by 82 percent to $3.7 billion in Q1’21 from $20.49 billion in Q1’20.
But the Q2’21 turnover indicated a massive YoY jump by 166 percent to $6.64 billion from $2.5 billion in Q2’20.
Similarly, on YoY basis the Q3’21 turnover also indicated a huge 162 per cent jump to $9.91 billion from $3.78 billion in Q3’20.
Meanwhile, the naira depreciated by N23.58 Kobo during the first nine months of the current year, as the indicative exchange rate of the window rose to N413.83 per dollar on 30th of September from N390.25 per dollar in January 2021.
In its latest Investment Views, analysts at United Capital Management PLC, expected a bright outlook for the naira in the window but noted that the CBN will need to devalue the naira to increase activities in the window.
“The recent pressures observed at the parallel market continue to be driven by FX supply scarcity as BDCs become more competitive for dollar flows.
“In the absence of any CBN intervention, our short term overview for the parallel market remains dim. “However, our outlook for the naira remains bright for the official window although we hold our position that the CBN may need to further devalue the Naira in the official window to see increased activity in that window.”