Naira strengthens to 367/$1, drops against Pound at parallel market

The Naira on Thursday rebounded to close at 367 per US Dollar against 368 traded on Wednesday, but exchanged at a depreciated rate of 419 or 420 against the Pound Sterling at the parallel market.

The Nigerian currency however, remained stable at the Central Bank of Nigeria (CBN) official rate, which had traded at 305.95 to a dollar on Wednesday.

At the Investors and Exporters FX window, the local currency opened at 365.34 compared to the Wednesday rate of 365.16 and closed at an appreciable rate of 362.80 against 366.08 traded the previous day.

The naira, at the interbank forex market sold at 324.63 per dollar and closed at 419.74 and 370.24 against Pound and Euro, respectively.

Meanwhile, Nigeria’s interbank lending rate rose to about 15 per cent from the 5 per cent recorded last week. This was after commercial lenders made payment for dollar and Treasury bill purchases, thereby bringing down liquidity.

Forex dealers said that the interbank rate traded above the 40 per cent level on Wednesday because of the treasury bill auction. However, anticipating borrowing costs to rise next week, as the central bank is likely to continue its forex interventions to stabilize the naira.

Since February, CBN has been selling dollars in a bid to manage liquidity shortfall and reduce the gap between the official and black market exchange rates for naira.