Naira depreciates against dollar, pound at unofficial market
.Eases at NAFEX to 364.78/$1, gains 0.47%
The Nigerian currency, Naira, over the weekend, extended its losing streak against major foreign currencies, dollar and pound sterling at the unofficial segment of the Foreign Exchange (Forex) market to close at 367 and 478, respectively, against 366 and 477 sold on Thursday.
The naira, however, remained unchanged throughout the weekend at 430 per Euro, the same rate it traded on Thursday and Friday at the parallel market.
Although, it recorded a remarkable gain against the US dollar at the Nigeria Autonomous Foreign Exchange Market (NAFEX) window, otherwise known as Investors and Exporters FX window with a growth of 0.4 per cent to have a new closing rate of 364.78 per dollar on Friday, against 367.50 sold the previous day.
The naira, at the autonomous window opened at a better rate of 365.92, indicating a difference of 0.24 per cent, against $366.79 did on Thursday; and 367.46 on Wednesday, but slightly lower than 366.70 opened on Tuesday, while settled at an improved rate of 364.78 per dollar at the end of trading activities for the week under review.
The I&E FX window, also, reciprocated rebounded performance in terms of turnover recorded as at the close of market for the week, settled a total sum of $142.28m, compared to $53.13m daily turnover recorded on Thursday, showed an improved traded figure of $89.15m, even though it represented a decline of $19.89m, while compared to $162.26m stood on Wednesday, but better than $96.03m exchange on Tuesday, data obtained from the FMDQ OTC has revealed.
At the interbank window, the local currency ended the trading week at 365.20 to the dollar, 473.77 per pound and 429.40 against the euro, respectively. But at the CBN official foreign market, the naira fell further to 305.60 to the Greenberg, against 305.55 traded on Thursday and Wednesday, as well as 305.50 of the preceding day within the week under review.
Consequently, forex dealers and financial analysts believed that the parallel market rate is beginning to appreciate in response to improvements in the apex bank’s capacity to supply foreign exchange, with the parallel market rate rising below N370 per dollar in the recent time, after touching an all-time low of above N500 in February this year.
They opined that if the oil price holds up at the current level and the nation’s currency reserves continue to grow, the unofficial forex market rate will continue to appreciate until it converges with the inter-bank rate.
It would be recalled that between two devaluations of the inter-bank rate, CBN introduced a lot of obstructionist policies to suppress demand, such as forcing recipients of inward remittances to receive their funds in naira at the controlled inter-bank exchange rate, restricting foreign currency transactions on accounts held with Nigerian banks, and publishing an infamous list of 41 import items that would not be funded by CBN.
Motolani Oseni
