Naira gains five points at parallel market in one week

Trades flat at official FX market, NAFEX window

The Nigerian currency, Naira, at the parallel market over the weekend, strengthened by a total gain of five points at 365 to the dollar, against 370 sold a week ago, Daily Times findings have revealed.

This however, not the case at official foreign exchange market, as the local currency traded flat at 305.85 per dollar, compared to 305.65 traded during the period under review, even as it fell to 359.67 as at Thursday when the official forex market had to close earlier for the week, due to Friday and Monday declared as public holiday by the Federal Government of Nigeria in celebration of this year Eid-el Kabir festival.

But at the parallel market during the weekend, the naira stood at 365 to the dollar, indicating a stronger position compared to 370 exchanged a week ago, while pound and euro was seen at 467 and 432 respectively, as against 475 and 432 traded in the previous week.

Further checks, also showed that the autonomous FX window, which has been tipped to contribute immensely to the revival of the nation’s currency, closed the four days traded week on a downward note, as it ended the week low at 359.67, weaker than 359.56 traded per dollar in the earlier traded week.

Although, going into the last trading day of the week at the NAFEX window showed no indication of the likely drop because, it opened at 360.79 the same rate it did on Wednesday, a day earlier before the official closure of the forex market, but eventually shed 0.19 per cent on Thursday, to close at 359.67 against an appreciable rate of 359 to the dollar on Wednesday, latest data obtained from FMDQ OTC showed.

Considering, closing turnover at the Investor and Exporters FX window at the last trading of the week, showed a settled figure at $81.82m, representing a significant drop of $131.39m, compared to $213.21m stood a week ago (w-n-w).

This, despite the effort by the Central Bank of Nigeria (CBN) to continuously boost liquidity in the official FX market, so as to ensure convergence rate and the local currency, gains with the fresh injection of $297m, totaling $547m into the foreign exchange market in just one week.

However, the Naira, further extended gains at both the parallel market and at the Nigeria Autonomous Foreign Exchange Fixing (NAFEX) window, while it traded at 365 to the dollar at parallel market against 366 on Wednesday; and remained unchanged at 359.00 at the autonomous window.

However, with this new forex intervention, the retail Secondary Market Intervention Sales (SMIS) segment of the forex market received a boost on the last trading day of the week, while the total intervention for the week hit $547m.
The apex bank’s spokesman, Mr. Isaac Okorafor, had expressed confidence that the interventions would continue to guarantee stability in the market and ensure availability to individuals and business concerns with genuine demand for Forex transactions.

He said that the bank was resolute in its determination to intervene in the forex market with the aim of uplifting the naira’s exchange rate, boosting liquidity in the forex market; and ensuring timely execution and settlement for eligible transactions.

Exactly a week ago, today, Monday, September 4, the CBN’s intervened in the Inter-Bank Foreign Exchange Market to the tune of $250m, as the Small and Medium Enterprises got $100m; and the invisible segments was uplifted with $85m and $65m, respectively.

Okorafor said that the apex bank would pump even more liquidity into the market in the coming days, noting that the move by the CBN was necessary to enhance stability in the foreign exchange market.

He reiterated that in a bid to improve liquidity and ameliorate challenges encountered by critical stakeholders at this time of the year, the bank had ensured that pressures on the market from those seeking Forex for school fees and vacations were eased.