Currency gains strength, sells for N390 to a Dollar at parallel market
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| Dollar(top), Naira(down) |
- The Naira at N390/400 to a Dollar was last recorded in August 2016.
- Naira had also appreciated against the Euro, exchanging at N400 while remaining stable against the Pound Sterling at N465.
- It marked the beginning of true convergence of official and black market foreign exchange rates on Wednesday, when the dollar traded for N400.
Dollar's value continued to diminish against the Naira as the Nigerian currency was traded at N390 on Thursday in Abuja.
The News Agency of Nigeria (NAN) reports that the Naira had also appreciated against the Euro, exchanging at N400 while remaining stable against the Pound Sterling at N465.
The News Agency of Nigeria (NAN) reports that the Naira had also appreciated against the Euro, exchanging at N400 while remaining stable against the Pound Sterling at N465.
Following up the Nigerian currency rate to other currency in the parralel market, the last time Naira was N390/400 to a Dollar was in August 2016.
With the gains made by the local currency in the last five weeks, the naira inched closer to one of the Central Bank of Nigeria’s (CBN) key foreign exchange policy objectives of an exchange rate convergence.
It marked the beginning of true convergence of official and black market foreign exchange rates on Wednesday, when the dollar traded for N400.
With the gains made by the local currency in the last five weeks, the naira inched closer to one of the Central Bank of Nigeria’s (CBN) key foreign exchange policy objectives of an exchange rate convergence.
It marked the beginning of true convergence of official and black market foreign exchange rates on Wednesday, when the dollar traded for N400.
At the Foreign Exchange (FX) interbank market, the naira traded for N375 to the dollar for invisibles and N307 to the dollar for manufacturers and importers of raw materials eligible to buy Forex from the segment of the market.
The significant gains made by the naira at the parallel market, according to market analysts, is a reflection of the improved confidence in the Forex market following the sustained dollar interventions by the CBN since February.
A Bureau de Change (BDC) operator, who preferred anonymity in Abuja, told NAN that the gains made by naira over the dollar were due to CBN’s continued flooding of the market with dollars while there were very few or no customers to patronise them.
He said several retail customers who used to resort to the BDCs, which indirectly funded the parallel market, to fund invisible transactions now bought dollars at a lower rate from the banks.
The CBN Governor, Mr Godwin Emefiele, on Tuesday expressed optimism about the convergence of the Forex rates at the official and parallel markets, stating that the gains made by the naira against the greenback in the last five weeks were not a fluke.
The significant gains made by the naira at the parallel market, according to market analysts, is a reflection of the improved confidence in the Forex market following the sustained dollar interventions by the CBN since February.
A Bureau de Change (BDC) operator, who preferred anonymity in Abuja, told NAN that the gains made by naira over the dollar were due to CBN’s continued flooding of the market with dollars while there were very few or no customers to patronise them.
He said several retail customers who used to resort to the BDCs, which indirectly funded the parallel market, to fund invisible transactions now bought dollars at a lower rate from the banks.
The CBN Governor, Mr Godwin Emefiele, on Tuesday expressed optimism about the convergence of the Forex rates at the official and parallel markets, stating that the gains made by the naira against the greenback in the last five weeks were not a fluke.
Emefiele expressed how happy he was about central bank’s intervention yielding positive results.
“I am happy, indeed very gratified, that the interventions have been positive; we have seen the rates now converging and we are strongly optimistic that the rates will converge further.
“In terms of sustainability, I think it is important for us to say that the foreign reserves at this time are still trending upwards to almost 31 billion dollars as I speak with you.
“The fact that we have done this consistently for close to five weeks should tell everybody, or those who doubt, the strength of the central bank to sustain this policy," he added.
In all, the Central Bank has auctioned a total of 1.9 billion dollars through forward sales as well as targeted intervention for invisibles.
This amount does not include its daily intervention of 1.5 million dollars on the interbank market.
“I am happy, indeed very gratified, that the interventions have been positive; we have seen the rates now converging and we are strongly optimistic that the rates will converge further.
“In terms of sustainability, I think it is important for us to say that the foreign reserves at this time are still trending upwards to almost 31 billion dollars as I speak with you.
“The fact that we have done this consistently for close to five weeks should tell everybody, or those who doubt, the strength of the central bank to sustain this policy," he added.
In all, the Central Bank has auctioned a total of 1.9 billion dollars through forward sales as well as targeted intervention for invisibles.
This amount does not include its daily intervention of 1.5 million dollars on the interbank market.
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