The naira resumed its slide at the Investors and Exporters’ (I&E) window yesterday, closing at N409. 67 per dollar compared with N400/$1 last Friday, data obtained from the FMDQ website shows.
Until it stabilised at N400 per dollar last Wednesday the local currency had consistently closed weaker against the dollar at the I&E window in the last fortnight, thereby fuelling speculation that a devaluation was looming.
Indeed, in a recent note, analysts at leading provider of currency trading solutions, AZA, citing the CBN’s plan to settle February 24 Non-Deliverable Forwards (NDFs) at N412.14 on the official market, predicted that the naira would depreciate to N490 per dollar on the parallel market.
The NDF is an indicator of the direction of the exchange rate in the future and is often referenced against the spot rate of the exchange rate between the naira and the dollar.
On December 31, last year, the naira had closed at N410.25 at the I&E window fuelling speculation that the CBN had devalued the local currency.
CBN Governor, Mr. Godwin Emefiele, said last year that the apex bank would pursue exchange rate unification around the I&E window rate.
The naira was under pressure on the parallel market for most part of 2020 due to foreign exchange scarcity, occasioned by the slump in the price of oil( the commodity that accounts for about 90 per cent of Nigeria’s export earnings). However, in recent days, the naira has appreciated to N473 per dollar from N480/$1 on the parallel market.