Business Times

Daily Parallel Market exchange rate – ₦486/$1 |

The exchange rate between the naira and the US dollar as of Friday, August 7th 2020 closed at 486/US$1 in the parallel market. The exchange rate closed at 486/US$1 on Thursday 6th August 2020.

  • Naira: ₦486
  • Dollar: $1
  • Date: August 7th, 2020

The exchange rate between the naira and the British pound sterling closed at  ₦585/₤1 on Friday 7th August same as recorded on Thursday 6th August 2020.

UBA ADS

  • Naira: ₦585
  • Pounds Sterling: ₤1
  • Date: August 7th, 2020

Explore Economic Research Data From Nairametrics on Nairalytics

The exchange rate between the naira and the European euro closed at ₦550/€1 on Friday 7th August 2020. The exchange rate also closed at ₦550/€1 on Thursday 6th August 2020.

  • Naira: ₦550
  • Euro: €1
  • Date: August 7th, 2020

Activity: USD currently seels for an average of 486/US$1 in the parallel market

first bankData is collated from various black market dealers on the mainland and island of Lagos State where forex is sold. The price quoted daily on this page represents the average price obtained by our Research Team. Our prices are a guide and could be slightly different from the price you get when you eventually decide to buy or sell. This is a daily tracker and updated close of business. See table below for parallel market exchange rate dating to 2019.

The American dollar gained against major currencies at London’s trading session on Friday morning. The American Dollar Index, which tracks the U.S dollar against a basket of other major currencies, gained 0.27% to trade at 93.025 at the time this report was drafted.

Quick fact: The U.S. Dollar Index tracks the American dollar against other major currencies such as the Japanese yen, British pound sterling, Swedish Krona, the Euro, and more. Individuals hoping to meet foreign exchange payment obligations, via dollar transactions to European countries, and Japan, would need to pay fewer dollars in meeting such obligations.

UBA ADSWhy the U.S Dollar is presently up

Bullish sentiment is now on the greenback due to a combination of rising U.S. Coronavirus cases, a rise in U.S Treasury yields, and the fact that a new stimulus package deal from the U.S Congress won’t be available in the short term.

first bankThe Chief Global Market Strategist at AxiCorp, Stephen Innes, in a note to Nairametrics, explained why currency traders are increasingly bearish in the mid-term on the U.S dollar. He said:

“In these baffling pretzel logic confusing times, FX traders will follow one train of reasoning as the dollar will continue to revert to its counter cycle trend, the buck turns sour when the goings are good, and the buck turns sweet when the goings are bad.

“But this gnawing FX toothache means I still think that view seems far too quaint in its simplicity as at some point growth differentials and the data will count.

“Low yields forever are the ultimate invitation to strap on risk as consensus works off the theme “do not fight the Fed.” Equities, even at these elevated levels, continue to climb the ladder; gold similarly continues to power ahead; the USD is on a clear-cut weakening trend.”


Market Watch
Nigeria’s exchange rate at the NAFEX window appreciated significantly to N385.50 during intraday trading on Thursday, August 6, 2020. In another development, the exchange rate at the parallel market remained unchanged on Thursday as it closed at N474/$1 after exchanging as high as N486/$1.

Parallel Market: At the black market where forex is traded unofficially, the Naira remained unchanged against the dollar for a second consecutive day to close at N474/$1 on Thursday, according to information from Abokifx, a prominent FX tracking website. This was the same rate that it exchanged on Wednesday, August 5. However, in sharp contrast, Nairametrics forex tracker obtained a price as high as N486/$1 from some traders suggesting market volatility still persist.


This represents an impressive N3.75 gain when compared to the N389.25 rate close that was reported on the last trading day, Wednesday, August 5.NAFEX:
The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Thursday, closing at N385.50/$1.

  • The opening indicative rate was N386.88 to a dollar on Thursday. This represents a 91 kobo gain when compared to the N387.79 to a dollar that was recorded on Wednesday.
  • The Naira fell to as high as N393.05 during intraday trading before strengthening to the closed rate of N389. It also sold for as low as N383.75/$1 during intraday trading.

Forex is sold at several prices and at different times during the day.

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According to the data tracked by Nairametrics from FMDQ, forex turnover increased from $10.49 million on Wednesday, August 5, 2020, to $106.66 million on Thursday, August 6, 2020.Forex Turnover:
Meanwhile, forex turnover at the Investor and Exporters (I&E) window recorded a massive increase on Thursday, August 6, 2020, as it rose by 916.77% day on day.

  • The forex turnover for the day is the highest daily volume recorded in about 3 weeks. The dollar supply which had remained weak improved significantly during the day’s trading.
  • The average forex sale for last week was a low volume of about $32 million which is a slight improvement on the $27 million that was recorded the previous week. FX turnover which topped the $100 million mark after weeks of very low volume, still falls short of the over $200 million turnover that was recorded in January.
  • Total forex trading at the NAFEX window in the month of July was $937 million compared to $875 million in June.
  • The exchange rate disparity between the official NAFEX rate and the black-market rate widened further on Thursday staying as wide as N88.5. Nigeria maintains multiple exchange rates comprising the CBN official rate, the BDC rates, SMIS, and the NAFEX (I&E window).

Exchange rate unification remains on the cards and yet to be implemented weeks after the central bank governor confirmed it will be executed.

COVID-19 Pressures

Nigeria’s airspace remains closed to commercial international flight operations and won’t be open till October 2020. Foreign travel has often been a source of demand for the greenback.

  • The recent demand for dollars at the parallel market is thought to be fueled by speculators.
  • The parallel market also caters to forex trades through wire transfers especially for buyers who cannot fulfil their dollar demands at the I&E window or the SMIS window.
  • The exchange rate for wired transfer is often at a premium to the black market rate.

Forex Challenges: Last few weeks have been most challenging for the foreign exchange market as it witnessed very low liquidity. The downward slide against the greenback and some other major currencies continued this week due to tightened liquidity in the system.

  • According to a report from FSDH research, forex inflows into the I&E window had dropped significantly in the second quarter of 2020 on the back of lower foreign portfolio inflows.
  • Although there was a slight improvement in the month of July, the turnover of $937 million is a far cry from the $3.19 billion, $5.02 billion and $3.7 billion turnover that was recorded in the months of January, February and March respectively before the lockdown which was triggered by the coronavirus pandemic.
  • The low oil prices have constrained the CBN’s capacity to intervene further in the foreign exchange market as dollar inflow still remains very low.

The exchange rate has faced significant pressure in both the NAFEX window and the black market. The pressure stemmed from declining external reserves and falling oil price

Market WatchNigeria’s exchange rate at the NAFEX window depreciated to N389.25 during intraday trading on Wednesday, August 5, 2020. In another development, the exchange rate at the parallel market remained unchanged on Wednesday as it closed at N474/$1 after exchanging as high as N483/$1.

Parallel Market: At the black market where forex is traded unofficially, the Naira remained unchanged against the dollar to close at N474/$1 on Wednesday, according to information from Abokifx, a prominent FX tracking website. This was the same rate that it exchanged on Tuesday, August 4. However, Nairametrics forex tracker obtained a price of N483/$1 from some traders who we also source information from.


The Naira fell to as high as N390 during intraday trading before strengthening to the closed rate of N389. It also sold for as low as N380/$1 during intraday trading. Forex is sold at several prices and at different times during the day.NAFEX:
The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Wednesday, closing at N389.25/$1. This represents a 25 kobo drop when compared to the N389 rate close that was reported on the last trading day, Tuesday, August 4. The opening indicative rate was N387.79 to a dollar on Wednesday. This represents a 67 kobo gain when compared to the N388.46 to a dollar that was recorded on Tuesday.


The average forex sale for last week was a low volume of about $32 million which is slightly better than the $27 million that was recorded the previous week. FX turnover which was not impressive last week has not shown any sign of recovery despite the picking up of business activities after the 2-day Sallah holiday.Forex Turnover:
Meanwhile, forex turnover at the Investor and Exporters (I&E) window recorded a decline on Wednesday, August 5, 2020, as it dropped by 57.46% day on day. According to the data tracked by Nairametrics from FMDQ, forex turnover declined from $24.66 million on Tuesday, August 4, 2020, to $10.49 million on Wednesday, August 5, 2020. The volume is the lowest in almost 2 months.

Total forex trading at the NAFEX window in the month of July was $937 million compared to $875 million in June.

The exchange rate disparity between the official NAFEX rate and the black-market rate remained wide on Wednesday staying as wide as N84.75. Nigeria maintains multiple exchange rates comprising the CBN official rate, the BDC rates, SMIS, and the NAFEX (I&E window).

Exchange rate unification remains on the cards and yet to be implemented weeks after the central bank governor confirmed it will be executed.

COVID-19 Pressures

Nigeria’s airspace remains closed to commercial international flight operations and won’t be open till October 2020. Foreign travel has often been a source of demand for the greenback.

beyondperception

  • The recent demand for dollars at the parallel market is thought to be fueled by speculators.
  • The parallel market also caters to forex trades through wire transfers especially for buyers who cannot fulfil their dollar demands at the I&E window or the SMIS window.
  • The exchange rate for wired transfer is often at a premium to the black market rate.

Forex Challenges: Last few weeks have been most challenging for the foreign exchange market as it witnessed very low liquidity. The downward slide against the greenback and some other major currencies continued this week due to tightened liquidity in the system.

According to a report from FSDH research, forex inflows into the I&E window had dropped significantly in the second quarter of 2020 on the back of lower foreign portfolio inflows. Although there was a slight improvement in the month of July, the turnover of $937 million is a far cry from the $3.19 billion, $5.02 billion and $3.7 billion turnover that was recorded in the months of January, February and March respectively before the lockdown which was triggered by the coronavirus pandemic.

The low oil prices have constrained the CBN’s capacity to intervene further in the foreign exchange market as dollar inflow still remains very low.

The exchange rate has faced significant pressure in both the NAFEX window and the black market. The pressure stemmed from declining external reserves and falling oil price

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