On Thursday, March 23, 2023, the value of foreign exchange (Forex or FX) traded in the official market’s Investors’ and Exporters’ window fell.
According to data obtained from FMDQ Exchange, foreign exchange supply in the official market fell by N351.74 million.
During Thursday’s trading session, investors and exporters exchanged $80.03 million. This is 81.46 percent less than the $431.77 million they traded for on March 22, 2023.
The value of forex dropped as the Naira depreciated in value to the Dollar, which was exchanged for N461.67 kobo/$1 on Thursday below the N461.50 kobo/$1 the exchange rate closed Wednesday’s trading
It means Nigeria’s currency depreciated by -0.03 per cent, while the cost of buying one Dollar went up by N0.17 kobo when both days’ exchange rates are compared.
There has been forex scarcity in Nigeria, resulting in the Central Bank of Nigeria (CBN) releasing various policies to ensure recovery of Dollars outside the official market.
One such policy is the ‘Race to $200 billion in FX Repatriation (RT-200)” program introduced in February 2022 to encourage investors to repatriate forex obtained from the official market, as well as proceeds of international transactions. The RT-200 program is based on the non-oil export proceeds repatriation rebate scheme, which compensates traders who repatriate foreign currency.
Nigeria’s central bank anticipates raising $200 billion through the RT-200 program within three to five years, ensuring the stability and sustainability of foreign exchange inflows, and assisting export-oriented firms in expanding their export operations and capabilities.
It was also started to increase the level of contribution of non-oil exports into Nigeria’s depleting foreign reserves, which are heavily reliant on the country’s oil revenue and the aviation market.
In February 2022, the central bank also ceased weekly sales of foreign currency to black market Bureau De Change operators.