Naira gains against US Dollar, exchanges at N793.70/$

On the Investor & Exporter FX window on Wednesday, the naira strengthened against the dollar and ended the day at 793.70/$.

The local currency had earlier traded at N825 a week earlier on the I&E window.

According to figures obtained from the FMDQ, the trading, which commenced at 778.07/$ on Wednesday reached a high of 853/$ before closing at 793.70/$.

The trading also recorded a turnover of $87.19m as of the end of trading.

Some Bureau de Change operators who spoke to our correspondent said the dollar was bought and sold at N820 and N825 at the parallel market.

The Central Bank of Nigeria, in recent weeks, directed Deposit Money Banks to remove the rate cap on the naira at the I&E window to allow for a free float of the national currency against the dollar and other global currencies.

The banking regulator explained its new forex operation in its report on ‘Understanding the operational changes to the foreign exchange market’.

By collapsing all segments in the FX market into the I&E window, it said this meant all eligible FX transactions in the market would only be done via the I&E window, as all other windows ceased to exist.

“The I&E market functions by a willing buyer, willing seller system, where an entity with demand for FX seeks out another entity with FX to sell at an agreed price through an authorised dealer,” the CBN stated.

On the concept of the willing buyer and willing seller model, it explained that the rates were mutually agreed by both parties.

The CBN said PTA, BTA and other invisible transactions would continue to be accessed through the banks at the prevailing market rate.