Naira closes 398/$1 at parallel market

.As CBN intervenes with $100m at interbank, $31m to BDCs

The Nigerian currency, the Naira closed trading in the first week of April at 398 to a dollar at the parallel market after hovering between 390 and 395 earlier in the week.

This is just as the Central Bank of Nigeria (CBN) sold over $31million dollars to 3,135 Bureau de Change (BDCs) operators nationwide through the IMTSO window, as well as intervention of $100 million in the interbank market.

However, trading activities on the foreign exchange markets seen the local currency traded between 380 and 385 to the dollar at the unofficial market, as the apex bank reiterates determination in achieving a convergence foreign exchange market.

For instance, the CBN increased its sales of forex to bureau de change (BDC) operators on Tuesday to $10,000 per week, and sold the dollar once a week to curb logistical issues.

After the sales to the parallel market, the naira appreciated slighted to trade around 380 to the dollar, and on Thursday $100 million was auctioned at the interbank wholesales window, with the aim of meeting legitimate needs at that segment of the foreign exchange market.

Despite the central bank efforts, the naira was quoted at 405 per dollar on the black market but closed at N398 to the greenback.

“Ironically this development did not help the naira from recovering as being witnessed previously in the market as naira reaches an all high of N405per dollar but eventually closes at N398 to a dollar as a result of the disbursements to BDCs later in the day”, President, Association of Bureau De Change of Nigeria (ABCON), Aminu Gwadabe told our correspondent.

Although, the naira on Friday traded at 306.15 on the official market, while the British pound dropped from N475 earlier in the week, to N490 at the close of business on Friday at the parallel market. As Euro traded at N425, showing a decline of about 25 points from N400 sold earlier in the week.

But the head of BDC s has linked the recent sharp drop in the value of the local currency against other major foreign currencies to the activities of the speculators.

According to him, “Renewed on slough on the naira was because of the return of illegal foreign currency cash evacuation through our Porous borders and airports, as Dubai in UAE enjoy the. Illegal evacuation, operators/players compromise, sales of debit cards by banks rather than cash, max $10,000 cash allowable for travelers at the nation airports.

Similarly, forex analysts have reacted to the latest rebound of the dollar, saying speculators might be responsible for the loss recorded by the naira.

“The Nigerian economy is an import-dependent one. It is a question of demand and supply and the issue here has to do with liquidity, however, we cannot rule out the activities of speculators in this regard,” a currency expert at Ecobank Nigeria, Mr. Kunle Ezun, said.

It would be recalled that the central bank had on Monday last week injected a total sum of $240 million into the foreign exchange market.

Specifically, it released the sum of $90m to meet requests for invisibles such as business travel and personal travel allowances, medical and school fees, while the sum of $150m was also made available to authorised dealers in the interbank wholesale auction window on the same day.