Dollar Turnover In I&E Rises By 152% To $2.16bn In January
The volume of dollars traded (turnover) in the Investors and Exporters (I&E) window of the foreign exchange market rose sharply by 152 per cent, Year-on-Year (YoY), to $2.16 billion in January 2022 from $906.44 million in January 2021.
Analysis of weekly turnover in the window for January 2022 showed that $337.65 million was traded in the first week of January.
Turnover rose by 91 per cent to $645.44 million in the second week and down by 9.2 per cent to $585.86 million in the third week.
The downward trend continued in the fourth week as turnover fell by 15 per cent to $495 million. Turnover stood at $95.07 million on the last day of the fifth week.
Meanwhile, the naira appreciated by 67 kobo during the period as the indicative exchange rate of the window fell to N415.33 kobo per dollar on January 31st from N416 per dollar on January 5th.
Similarly, the naira appreciated by N5 in the parallel market
Analysis of data from black market traders showed that the indicative exchange rate fell to N570 per dollar on January 31st from N575 per dollar on January 1st, 2022.
However, analysts in the financial sector of the economy have projected further currency adjustment in 2022 due to external imbalances and tepid inflows.
Analysts at CardinalStone Research in their outlook for 2022 said: “Based on the latest data as of second quarter of 2021 (Q2’21), the Central Bank of Nigeria (CBN) estimated the fair value of Naira at N462 per dollar, which implies a 12.3 per cent overvaluation versus the I&E rate.
“To curb inflationary pressures and avoid a worsened currency position, we think that the CBN is unlikely to adjust the Naira to N462 per dollar. Hence, we project a Naira devaluation of N440 per dollar in 2022.”
On the other hand, analysts at WSTC Securities Limited in their 2022 outlook, said: “Exchange rate is expected to remain under pressure, due to higher demand.
“Although higher crude oil prices are positive for the external reserves, the economy is yet to fully capture the upside of higher crude oil earnings due to weak output.
“There is a likelihood for the exchange rate to trend slightly higher in 2022.
“We expect the exchange rate to trade between the band of N415 – N430 in the I&E Foreign exchange window in 2022.”