Naira Closes at 312/Dollar at Interbank Market

1000 naira bills (Nigerian currency)1000 naira bills (Nigerian currency)

The Naira closed at 312 against the dollar on Tuesday in a single interbank market trade of $100,000, Thomson Reuters data showed.

The local currency was offered at 313 to the dollar and a total of $3.11m had been traded by 1230 GMT.

The local currency closed at 312.50 against the dollar, the FMDQITC website showed.

At the parallel market, the naira closed flat at 395 against the greenback, the same rate it closed on Monday.

The naira had depreciated to 400 against the dollar on Friday.

Economic and financial analysts have linked the wide depreciation in the value of the naira against the dollar at the parallel market to huge demand for forex by holidaymakers seeking to travel abroad.

However, some experts said the huge demand for forex at the parallel market was beyond the normal summer rush.

They linked the development to the activities of speculators and significant demand by manufacturers and importers whose demand was not being met at the interbank market.

Currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said, “The issue still has to do with inadequate forex supply. As far as you continue to have some 41 items banned from the interbank market, importers and manufacturers of those items will continue to seek for forex at the parallel market.

“This is part of the reason you are having pressure at the parallel market.”

According to Ezun, the global plunge in oil prices has affected the capacity of the Central Bank of Nigeria to defend the naira.

“If the price of oil should go up, more forex will come in and you will see that things will change,” he added.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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